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Published by Amity University Press for exclusive use of Amity Directorate of Distance and Online Education,
Amity University, Noida-201313
Contents
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Page No.
Module - I: Fundamentals of Strategic Management 01
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1.1 Introduction to Strategic Planning
1.1.1 Meaning and Concept of Strategic Planning
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1.1.2 Strategic Management Process
1.1.3 Challenges to Strategic Management and Organisational Adaptation
1.1.4 Strategic Decision Making
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1.2 Strategic Direction and Purpose
1.2.1 Understanding Strategic Direction and Purpose
1.2.2 Mission and Vision Concept
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1.2.3 Corporate Governance - Meaning
1.2.4 Role of the Board of Directors
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1.2.5 Corporate Social Responsibility
1.2.6 Ethical Decision Making

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1.2.7 Principles of Ethical Decision Making
1.2.8 Ethical Decision Making Model
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Case Study
Module - II: Environment Analysis and Diagnosis 50

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2.1 Concept of Environment Analysis

2.1.1 Concept of Environment Analysis in Business
2.1.2 Impact of Environment on Strategic Planning
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2.2 External Environment Scanning

2.2.1 Understanding External Environment Scanning
2.2.2 Remote Environment
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2.2.3 Industry Analysis Through Porter’s Approach

2.3 Internal Environment Scanning
2.3.1 Understanding Internal Environment Scanning
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2.3.2 Resource Based Approach

2.3.3 Value Chain Analysis
2.3.4 Benchmarking
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Case Study
Module - III: Strategic Formulation and Choice 95

3.1 Situation Analysis
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3.1.1 SWOT Analysis for Strategic Choice

3.1.2 Understanding Balance Scorecard Approach
3.1.3 Example of Balance Scorecard Approach
3.1.4 Formulating Corporate Strategies
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3.2 Formulating Business Level Strategies
3.2.1 Porter’s Competitive Strategies
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3.2.2 Red and Blue Ocean Strategies
3.2.3 Strategy Formulation at Functional Level
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3.2.4 Multi-Business Strategy
Case Study
Module- IV: Strategic Implementation and Control 140
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4.1 Implementation
4.1.1 Importance of Implementation Process in Strategic Planning
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4.1.2 Objectives Setting
4.1.3 Task Setting
4.1.4 Resource Allocation
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4.2 Control
4.2.1 Importance of Control in Strategic Planning

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4.2.2 Control as per Organisational Structure
4.2.3 Role of Leadership
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4.2.4 Role of Culture
4.2.5 Strategic Control
4.2.6 Types of Strategic Control
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4.2.7 Importance of Strategic Control

4.2.8 Factors affecting Strategic Control
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Case Study
Module - V: Strategic Change, Innovation and Entrepreneurship 184

5.1 Managing Strategic Change and Innovation
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5.1.1 Concept of Change Management in Organisation

5.1.2 Types of Change
5.1.3 Managing Strategic Change
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5.1.4 Theories of Planned Change in Organization

5.1.5 Managing Resistance to change
5.1.6 Role of Technology in Strategic Development
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5.1.7 Role of Innovation in Strategic Development

5.2 Entrepreneurship
5.2.1 Concept of Entrepreneurial Ventures
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5.2.2 Strategic Issues in Entrepreneurship Ventures

5.2.3 Dealing with Strategic Challenges in Organization
Case Study
Business Strategy 1
Module - I: Fundamentals of Strategic Management

Notes
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Learning Objectives:
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At the end of this topic, you will be able to understand:
●● Meaning and concept of Strategic Planning
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●● Strategic Management Process
●● Challenges to Strategic Management and Organisational Adaptation
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●● Strategic Decision Making
Introduction
A “military” term is “strategy.” In 1955, Peter Drucker wrote a book titled “The
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Practice of Management” that highlighted the significance of strategic decision-making.
In this According to him a strategic decision is “any decision on corporate objectives
and on how to achieve them.” But when innovators like Alfred Chandler and Michael
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Porter created the work strategy, which is recognised as the Classical Approach, the
concept’s significance was fully realised. It required the application of formal and
methodical design procedures. It was less concerned with implementation and more
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focused on long-term planning. It largely disregards the role of people. Additionally, it is
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quantitatively grounded and has an outward orientation. on the other hand, emphasised
the qualitative and human aspects of strategy. They saw “strategy” as evolutionary. It
showed that “organisational behaviour” as part of organisational processes.
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1.1 Introduction to Strategic Planning
1.1.1 Meaning and Concept of Strategic Planning

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Figure: Meaning of Strategic Planning

Source: https://images.slideplayer.com/13/4045408/slides/slide_3.jpg
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Planning strategies and putting them into action to accomplish organisational

objectives is known as strategic planning. One could begin by asking themselves basic
questions like, “What are we doing?” Should we stick with what we are we’re doing or
alter our product offering or method of operation? How do social, political, technological
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and other environmental issues affect our business operations? Are we willing to accept
these modifications, etc.?
Given the organisation’s strengths and weaknesses, strategic planning helps us

understand who we are and where we want to go so that environmental challenges and
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opportunities can be taken advantage of. In order to offer the business direction and
consistency, strategic planning entails “a complete self-examination regarding the goals
and means of their accomplishment.”
Amity Directorate of Distance & Online Education
2 Business Strategy
It Startegic Planning is “a process through which managers develop and put

Notes
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into action plans targeted at maximising the achievement of strategic goals, given
the available external and internal variables.” Strategic planning is the formalisation
of planning, which involves making long-term strategies for the achievement of
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organisational goals in an effective and efficient manner.
Planning is an action we take before acting, which is called anticipatory decision-
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making. Before taking any action, this process involves deciding what to do and how
to do it. Strategic planning is a managerial process for creating and preserving a
workable fit between organisation’s objectives, skills and resources and its changing
environment. The strategic strategy of the business serves as the foundation for
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planning. It acts as a manual for creating good sub-plans that will help the organisation
reach its goals. The goal of strategic planning is to assist a firm in choosing and
structuring its businesses in a way that would maintain the company’s health despite
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unanticipated environmental changes. It aims to rework or reconfigure the company’s
operations and goods to produce desired profitability and growth.
Strategic Planning – Definition
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The process of selecting a company’s long-term goals and then determining the
best strategy for accomplishing those goals is known as strategic planning. The process
by which an organisation determines its strategy or direction and decides how to
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allocate its resources to pursue it includes mission and people. Strategic planning is
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a process to identify or reevaluate an organisation organisation’s vision, mission and
goals and then to map out the objective (measurable) means to achieve the goals.
Strategic planning is a methodical, legally-recorded process for identifying the few

crucial choices that an organisation, regarded as a corporate whole, must make in order
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to succeed over the coming few years. People make decisions regarding desired future
results, how outcomes are to be achieved and how success is assessed and evaluated
during the continuous and methodical process of strategic planning. A community
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continuously develops new systems through strategic planning to accomplish

remarkable goals. Strategic planning is a methodical procedure for choosing objectives
to be accomplished in the near future.
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It consists of –
i) The fundamental presumptions made by management regarding the

economic, technological and competitive environments of the future.
ii) Setting objectives to be accomplished in a predetermined amount of time.
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iii) SWOT analysis execution.

iv) Choosing the primary and backup plans of action to carry out the objectives.
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v) Creating, carrying out and keeping track of operational or tactical strategies to

accomplish interim goals.
The process of constructing a plan for the general path or direction of an
endeavour in order to maximise its future potential through strategic planning is
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organised and methodical. Many businesses use the strategic planning process
to pinpoint crucial success elements that chart the way for future expansion and
profitability.

Business Strategy 3
Strategic Planning – Features

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The following are the salient features of strategic planning:
1. Questioning Process:
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It provides answers to queries about our current situation, our desired future course,
and our current and ideal selves.
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2. Time Horizon:
It aims for long-term planning while considering the opportunities presented by the
current and foreseeable environmental conditions. It aids organisations in analysing
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their advantages and disadvantages and making environmental adjustments. To
make strategic planning useful, managers must have a long-term perspective.
3. Pervasive Process:
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It occurs in all organisations and at all levels, although top executives are more
heavily involved than middle or lower-level managers since they have a greater
sense of the future than others.
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4. Task
Attention is given to essential and high-priority tasks rather than ordinary and
everyday tasks, which concentrates the organisationorganisation’s capabilities and
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resources. It transfers funds from low priority to high priority areas.
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4. Constant Process:
OrganisationOrganisations can react to the dynamic, ever-changing environment
through strategic planning, which is a continuous process.
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5. Coordination:
It synchronises an organisationorganisation’s internal and external environments,
its financial and non-financial resources and its short and long-term strategies.
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Strategic Planning: the following advantages of strategic planning are available:
1. Financial Gains:
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Companies that develop strategic plans see improved sales, lower expenses, higher
EPS (earnings per share), and higher profits. Making strategic plans has financial
benefits for businesses.
2. Organisational Activities Guide:
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Members are guided toward organisational objectives through strategic planning.

It integrates organisational efforts and actions in support of long-term objectives. It
guides members to become what they want to become and do what they want to
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achieve. It guides members to become what they want to become and do what they
want to do.
3. Competitive advantage:
In the age of globalisation, businesses with the ability to deal with competitive
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dynamics gain the upper hand in the market and outperform their peers in terms
of financial success. If they can predict the future through strategic planning, they

4 Business Strategy
will be able to do this. It gives management the ability to foresee issues before they
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happen and address them before they get worse.
4. Reduces Risk:
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Strategic planning gives data for risk assessment, helps to develop risk-reduction
measures, and identifies safe investment opportunities. As a result, there are fewer
chances of choosing the incorrect objectives and techniques.
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5. Benefits for Businesses with a Long Gestation Period:
The gestation period is the amount of time between an investment choice and the
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resulting income. Plans may not be carried out during this time due to disruptions
caused by technological or political pressures. Strategic planning reduces uncertainty
and empowers management to deal with opportunities and threats.
6. Encourages Innovation and Motivation:
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Top-level managers participate in strategic planning. They are dedicated to their
goals and plans, but they also come up with fresh ideas for putting those methods
into practice. This encourages inventiveness and motivation.
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Best possible use of resources is made possible by strategic planning, which
maximises production. General Robert E. Wood observes, “In one aspect, business
is like combat. Any number of tactical mistakes can be made and the firm will still
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succeed if the overarching plan is proper. Successful strategic planning is a result of
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good resource allocation, analytical thinking, organisational structure, coordination
and integration of functional operations and control system.
Planning Strategically: Restrictions

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Although strategic planning is crucial to management, its application has practical

constraints. The practical challenges faced in planning are shown by the reasons why
people fail at strategic planning. Planning must operate within a number of constraints,
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which makes this task challenging. These are the restrictions:
Problems with Alter: Considering how future conditions may change, the element
serves more as a limiting factor. The recurrence of new challenges is frequently
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exacerbated by consequences that make planning extremely difficult in a complex

and fast changing context. Long-term planning presents a more complicated change
management challenge. Planning frequently takes into account current circumstances
more than future requirements, which can occasionally lead to errors of judgement.
Numerous factors, including evolving technology, shifting customer preferences and
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corporate situations, change quickly and frequently without warning. Due to the stark
differences in the conditions between the two periods, planning decisions made in one
period may not be applicable in another.
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(1) Human Error:

There are several reasons why humans make mistakes in planning, both during
the formulation and execution phases. Some of the major failures include a lack
of commitment to planning, a failure to develop sound strategies, a lack of clear
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and meaningful objectives, a propensity to overlook planning premises, a failure to

recognise the scope of the plan, a failure to view planning as a rational approach, an
excessive reliance on past experience, a failure to employ the principles of limiting
Business Strategy 5
factors, a lack of support from top management, a lack of authority delegation, a

Notes
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lack of adequate control techniques, and resistance. These elements are to blame
for the organisations in question’s insufficient or incorrect planning.
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(2) Lack of Reliable Information:
The first fundamental obstacle to strategic planning is the absence of accurate
future-related data and information. Planning is concerned with future activity and
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the accuracy of future event predictions will determine the quality of the planning.
Since no manager is able to entirely and properly predict future events, planning may
cause operational issues. Lack of precise premise formulation further exacerbates
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this issue. Many times, managers may be unaware of the numerous circumstances
in which they must develop their planning initiatives.
(3) Lack of Flexibility:
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Managers must work within a set of predetermined variables when engaging in the
process of strategic planning. These factors may be more organisational or external
in nature. These frequently offer a lot of flexibility in planning action.
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(4) Time and Cost:
Managers should consider time and cost issues when going through the strategic
planning process. Since the precision of planning tools has no upper bound, the
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various planning steps can be as precise as necessary. But time and money
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constraints make planning difficult. Every manager in the organisation has a limited
amount of time, and if they are too occupied creating complicated reports and
instructions, they risk losing their efficacy. Organisational dysfunction results from
spending too much time securing information and trying to cram it all into small
plans.
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(5) Rigidity:
Many times, people believe that rigorous administrative action results from planning.
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+ The planning stifles employee initiative and forces managers to carry out their
duties in a rigid or straitjacket manner. In reality, rigidity could unnecessarily increase
the difficulty of managing tasks. This could lead to a delay in job output, a lack of
initiative, and an inability to adapt to a changing environment.
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Many people believe that planning has limited value because the best outcomes
can be achieved by fumbling through different forms of operations in which each
circumstance is dealt with as and when it becomes relevant to the current issue.
Though this factor of rigidity of planning is limiting factor but without planning, it
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is really difficult to operate particularly in large organisations. The planning also

involves cost on the part of the organisation. The various factors analysed above
contribute to the limitations of strategic planning, either making planning ineffective
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or making lesser degree of planned work.
1.1.2 Strategic Management Process

Developing strategies for employees to follow in order to perform better and gain
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a competitive edge is what strategic management is all about. Individually have a

competitive advantage if your company’s profitability is higher than it was in the past or
among competitors. Anyhow, the company’s strategy is outlined through the strategic

6 Business Strategy
management process. This approach enables managers and staff to select a set of
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corporate strategies that will improve your performance. It’s crucial to remember that
strategic management is a gradual process in which you must compare the success of
their business to that of their rivals and continuously tweaking their goals and objectives
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to gain a competitive edge.
Most importantly, the company’s managers and employees benefit from a
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larger viewpoint provided by the strategic management approach. They learn how
to comprehend, integrate, and make their job relevant to the employees inside the
organisational plan. But creating a connection between the organisational aims and
their personal objectives is an art. They ought to believe that achieving the company’s
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goals enhances their own capabilities. When employees could see the correlation
between their personal goals and the corporation’s objectives, then it would upsurge
their satisfaction, commitment level, and trustworthiness. When it ensues, then they can
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see the impact of environmental variations in their job, and the reaction and answer of
the company in terms of strategic management.
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Figure: Strategic Management Process

Source: https://i.ytimg.com/vi/z8HQx_TrSxc/maxresdefault.jpg
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Steps of Strategic Management Process

Some of the main steps of the strategic management process are as follows:
Strategic Mission and Goals The management evaluates the company’s

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market position in relation to its mission and goals first. The senior management
has determined the company’s direction, desire, and value, which are outlined in the
mission and vision statement. But the desired outcomes that the business hopes
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to attain through its operations and procedures are its goals and objectives. The
mission statement’s objectives could be either short-term or long-term. They are often
quantifiable and short-term.
Contextual Analysis
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Data collection, inspection, and delivery to management for strategic goals are
all steps in the environmental analysis process. The company would benefit from an

Business Strategy 7
analysis of the numerous internal and external forces affecting it. Following the start
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of the procedure, management should regularly check the process in order to make
improvements.
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Strategy Formulation and Strategic Alternatives
Choosing the appropriate course of action for the business to take in order
to achieve its goals is known as strategy formulation. The management develops
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functional, corporate, and business-level strategies after carefully undertaking the
environmental study. The following are some of the crucial actions in the strategy
formation phase;
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◌◌ Creating the business’s mission statement
◌◌ Examining the surroundings outside
◌◌ Examining the sector
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◌◌ Carrying out an internal analysis of the business.
◌◌ Alternative approaches
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Strategy Implementation
Here, the business puts into practice the plan it decided upon during the
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formulation stage. Designing, structuring, assigning resources, managing human
resources and developing the decision-making process are all parts of the
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implementation process. The following are some of the key phases in putting the
strategy into action: determining annual targets; developing functional strategies; and
creating policies. The business should have institutional leadership, structure and
culture.
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Assessment and Control

The evaluation step in the strategic management process analyses the
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performance of the business, evaluates internal and external actions, and, if necessary,
implements corrective measures. Putting the organisation’s strategy into practice, it
ensures that the company has accomplished its goal.
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Problems of Strategic Implementation Process

It’s difficult to implement strategic management, that’s why the strategy
implementation process fails. Some of the main problems of the strategic
implementation process are as follows;
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Negative Accountability
Objectives, KPIS,(Key Performance Indicators) and other project specifics are
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outlined in the teamwork. It indicates that nobody accepts responsibility for the project’s
objectives, which causes confusion. In the end, nobody is there to accept blame.
Reporting System is Poor

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The process of the reporting system is quite erratic. It calls for you to hold meetings
frequently around the company and draw people’s attention to the objectives.

8 Business Strategy
Low Data Availability

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The term “it is tough to collect data” is frequently used, but it is more of a
justification than a real issue. It would have access to the data to assess your
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performance and make a choice if used the human resources and tools effectively.no
link between reward and success. The linkage between a company’s goals and rewards
is very important because it motivates them to perform better in their jobs and daily
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tasks.
1.1.3 Challenges to Strategic Management and Organisational

Adaptation
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Figure: Barriers to Strategy Implementation

Source: https://www.sciencedirect.com/science/article/pii/S0024630105000634
Strategic goals are often large and complex objectives that almost always require
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many resources scattered across many departments and locations to accomplish

them. Establishing clear goals across teams will result in more clarity on priorities and
responsibilities.
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1. Recommendation
Make that a goal-setting process has been adopted by the entire organisation.
Although employing SMART (goals—specific, measurable, achievable, relevant, and
timely) is preferable to doing nothing, the objectives and key results (aka “OKRs”)
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strategy is quickly becoming the new norm. Make sure there are recognised best
practices for writing objectives. The objectives of each manager’s team should be
his or her responsibility. Use OKRs if no best practices are being followed.
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2. Inadequate alignment
Even with appropriate goal-setting, teams and individuals may have difficulties due to
a lack of alignment, which frequently results in prioritising problems and cooperation
conflict, which can impede day-to-day efforts to accomplish the strategic goal. The
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non-strategic labour that individuals are so accustomed to performing is the main

cause of strategic misalignment usually non-strategic. Often non-strategic objectives
become the priority, as they are routine and often the most easily attained.

Business Strategy 9
Recommendation: By establishing clear alignment on who is working on which

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strategic objective, as well as what each of those objectives are will empower those
people to drive the priority over nonstrategic objectives. This is especially true if you
can see the alignment straight through the hierarchical structure.
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3. Inability to track progress
Spreadsheets are still widely used by corporations to keep track of goals. This can
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work between a manager and an employee, but these systems make it difficult
to compile data or establish openness. Even worse, their utilisation restricts the
capacity to control the achievement of strategic goals in real-timeManagers and
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staff, particularly millennials, demand immediate clarity on why and what is crucial.
The alignment, transparency, collaboration and manageability of an organisation
can all be improved, which will lead to more efficiency and increased output right
away. Knowing the outcome enables a company and everyone involved in that
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strategic aim to modify their approach and maximise the result.
4. People not connected to the strategy
We are more likely to adopt an operational tactical emphasis where our efforts can
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provide quick benefits since people, in general, appreciate routine and order. How
can we inspire people to operate differently when strategic goals are rarely this
simple and limited in scope? The best way to involve people in strategy more deeply
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is to integrate their personal and professional objectives. For instance, developing
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new abilities, taking on greater responsibility, collaborating with various teams and
individuals and working on “strategic teams” outside of their department. It is advised
that individuals first set their own strategic goals in order to better understand their
aspirations and preferences. The purpose of these personnel is then attempted to
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be aligned by managers with the bigger strategic strategy. Change the emphasis
from “an employee working inside a department” to “an employee working towards
a company’s strategic goal as part of a strategic team.”
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5. No measurements or leading indicators

The adagemyth “You manage what you measure” is crucial to the success of any
strategy. How can you manage the people and problems that can derail a strategic
aim without measurement? Setting quantifiable objectives and managing them is
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necessary. Predictive analytics and other leading indicators encourage management

dialogues at all levels. Starting with simply the most important strategic objectives
will help to reinforce the idea that executing the strategy is the most important thing
to concentrate on. Due to its emphasis on depth rather than breadth, it will also make
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the goals simpler to implement. The wise maxim is “Focus on less to accomplish
more.”
Adopt technology that offers predictive analytics for achieving goals. Tanics, for
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instance, offers predictive analytics on specific targets based on a unique algorithm

based on the length of time and timing of accomplishment updates. Executives,
managers and staff can use this as a checkpoint to evaluate the current emphasis
and allocation. Although it is not an exact science, predictive analytics offers a point
of reflection on how a goal is progressing. A goal will be managed more effectively
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the more visibility it has.

10 Business Strategy
It may appear like changing how your business implements strategy is a difficult
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and time-consuming change management effort, but it can be completed swiftly
and incrementally with noticeable effects beginning at the top. Executives stand to
benefit the most and can set an excellent example.
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Implement these best practices to start the transformation.
◌◌ Clearly state the strategic objectives. To give the objectives greater structure,
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use an approach like OKRs(Objectives and Key Results) .
◌◌ Establish executive objectives and show that the leadership team is
concentrating on strategy.
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◌◌ Make all strategic objectives visible to all. Show how the objectives of each
executive intersect.
◌◌ Use technology; without it, it is impossible to achieve transparency and real-
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time tracking.
◌◌ Demonstrate that you are monitoring what is important, controlling what is
essential, and—most importantly—that you are going to achieve what are
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importantsymbol
1.1.4 Strategic Decision Making

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In order to obtain an edge, strategic decision-making involves understanding how
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choices interact and affect the company. Making the incorrect choice at the wrong time
can have disastrous results. To put it another way, the strength of strategic thinking
comes from fusing the strength of the right decision with the strength of the right timing.
OrganisationOrganisations must choose actions that will maximise short-term results
and avoid long-term dangers if they want to be competitive and thrive. Making strategic
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decisions reveals a company’s future prospects and the options that can be put into
practice to achieve success.
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In the commercial sector, data-driven and strategic tactics are becoming more
popular. The five basic decision-making phases are combined with the notions of
opportunity, threat, opposing forces and risk in the strategic decision-making process.
The lifeblood of your organisation is the process of strategic decision-making. It is the
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duty as a business owner to take actions that will support the survival, expansion and
success ofthe enterprise.
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Business Strategy 11
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Figure: Strategic Decision Making
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Source: http://3.bp.blogspot.com/-8dBJAEBGc2g/TusHDGodsiI/
AAAAAAAAAvk/4w_F-yBePUg/s1600/6Is%2Bof%2BStrategy.PNG
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Strategic Decision Making: Reasons and Its Importance
The organisationorganisation must perform better in the future whether the
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present is better or worse. It is necessary to make strategic decisions to overcome the

obstacles that come in the way of the organisationorganisation’s progress.
Why Strategic decision-making is the most essential thing for an

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organisationorganisation
●● A crucial stage for all enterprises. This approach makes it possible for
organisations to learn, enhances performance and organisational results, and
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lessens the likelihood of strategic failure or rivalry. It offers business intelligence

reports so that businesses can research and forecast upcoming trends.
●● A skill that should be practiced and learned. For today’s leaders, the ability to
make strategically sound decisions is crucial. If not a skill that should be learned,
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utilised a couple of times and then lost. It iscrucial to keep up with and advance
your strategic decision-making abilities throughout time because they can give
your firm a competitive advantage.
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●● Among the most crucial tasks any business can perform. Decisions requiring
a high level of responsibility and a focus on long-term goals are referred to
as strategic decisions. They require extensive understanding of a wide range
of topics, including the procedures, frameworks and regulations. Additionally,
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decisions must be planned out before being implemented. One such product that
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is safe and packed with alternatives for making better and wiser selections ..
●● Involves the application process as well. Making the appropriate decisions at
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the appropriate moment is the essence of strategic decision-making. This is the
procedure for coming to a decision and then carrying it out. Making a decision
and then not acting on it is not what decision-making is all about. Execution is the
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procedure that is actually doing the work.
●● A main tool to drive business growth. It is the way to find out what the finest
way of achieving a business objective is and what the risks are. This is why
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administrations should have a decision-making process that includes a well-
defined set of policies and instructions which are adhered to by all.It can also use
dissimilar data analytics tools and data discovery tools for helping them making
better results.
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Few more reasons why strategic decision making is important
●● Connections between intentional and emergent strategy. A plan is made for the
organisation as part of the deliberate strategy. Every company has a planned
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strategy. The newly developed tactic is a reaction to the current predicament.
Future action plans are also developed using business intelligence strategies.
●●
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Concerning the evaluation, analysis and resolution of all the variables influencing
an organisation’s performance and survival.
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●● Assists organisations in achieving their objectives. Making wise decisions is a key
factor in the organisation’s success. These choices are made in an effort to fulfil a
specific goal. These are based on the information that is currently known regarding
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the circumstance. Additionally, Power BI reports can assist with gaining fresh
perspectives on business performances.
●● Aids groups in taking initiative. The strategic choices you make increase the
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effectiveness of your organisation when put into practice. The method you choose
to proceed in the future will determine how the rest of your firm operates. You will
feel good or horrible depending on how you choose to act.
●● Essential to any organisation’s success. An organisation’s decisions can have
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a wide range of effects, including how much revenue it generates, how many
employees it has, the type of work it does, and how its clients and the community
perceive it. This is one of the more important factors for businesses to use
predictive analytics consultants for strategic decision-making.
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Figure: Strategic Decision Making
Source: https://thumbs.dreamstime.com/z/strategic-decision-making-
components-128868184.jpg
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Who Should Be Involved in The Decision-Making Process?
The fact is that a lot of organisations, particularly businesses, don’t make many
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strategic decisions. They are too preoccupied attempting to make their own decisions,
such as “if we like this product, we need to get it in the store today” or “if we don’t like
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the product, we need to keep it out of the store.” Making judgments, however, is not the
most important thing in the world, especially without accurate company data, as you
may already be aware. Without sound strategic choices, a corporation is essentially a
collection of individuals carrying out various tasks. A firm is a clearly defined collection
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of tasks with a specified purpose and a set of guidelines. It is the only being that
possesses all necessary power to use a certain method to achieve a given goal.
So, who should be involved in the decision-making process? Should it be the

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CEO? The board of directors? The Senior Vice President? The whole executive
team? The answer is: it depends on the type of organisation you are in and the type of
decision you’re making. While you may have a variety of opinions and preferences, the
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bottom line is that most decisions should be made by all the stakeholders involved.
1.2 Strategic Direction and Purpose

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Introduction
Strategic planning’s primary goal is to match a company’s mission and vision. The
mission serves as the foundation for planning, the vision as the goal, and the strategic
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plan as the road map that guides you from one to the other. Without a purpose and
vision, the plan would be meaningless. Values are crucial to the process of strategic
planning because they give the organisation a benchmark for creating effective
strategies and tactics; if a strategy or tactic conflicts with the company’s values, it
should be reevaluated. You should examine your organisation’s mission, vision, and
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values statements at various points during the strategic planning process, even if they
are already clearly stated. Make sure that your mission, vision, and values are up to

date, resonate with key stakeholders, and serve as a solid foundation for planning.
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Don’t assume that every member of your strategic planning team can articulate
these concepts. This is especially true if some team members are relatively new to
the organisation. Spend the time necessary to construct mission, vision, and values
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statements if they don’t already exist or if they need to be updated and amended.
These statements can serve as an effective foundation for developing strategies. Your
strategy plan will have a lower chance of success if your mission, vision, and values
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statements are inadequate.
Mission A mission statement is a brief description of the organisation’s fundamental

purpose. A mission statement answers the question, “Why do we exist?” For instance,
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the mission statement of LibertyHealth in Jersey City, NJ, is, “We enhance life.” The
mission statement of Memorial Health in Savannah, GA, is, “With compassion, we heal,
teach, and discover.”
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Vision A vision statement is much more than just an image of your company in the
future. Your motivation and the structure for your strategic and operational planning are
both included in your vision statement. A vision statement expresses the aspirations
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and goals for the future of your organisation. It serves as a reminder of what you are
attempting to create. A vision statement sets the direction for strategic and operational
planning even while it doesn’t specify how one will get there.
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Values Values are characteristics or attributes that are seen as valuable; they
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indicate a person’s top priorities and most ingrained motivating factors. Values
specify how members of the organisation should interact with one another. Values
are declarations of the importance that an organisation will place on its stakeholders,
vendors, employees, and customers.
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1.2.1 Understanding Strategic Direction and Purpose

Running a business without an eye toward strategic direction is liking setting out on
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a road trip to an unfamiliar place without a map or a navigation app. You may eventually
reach your destination, but the journey will be chaotic, and you’ll most likely waste more
effort than necessary. Developing a solid strategy that outlines your company direction
will help you to increase profitability while making your day-to-day work less stressful.
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Strategic direction refers to the plans that need to be implemented for an

organisation to progress towards its vision and fulfil its goals. It ensures owners
and management can communicate the importance of employees work and their
contribution to achieving business objectives.
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1. Setting strategic direction

Making an idea into a profitable firm is frequently the focus of an entrepreneur’s
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early strategy. This entails developing a unique or distinctive product or service that
fits a certain market.
In order to better meet the requirements and desires of clients, it is necessary to
innovate, test, and develop new products. But in many respects, this isn’t actually a
plan for your company! Here, business owners are truly starting their own enterprise.
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It’s time to enter the following stage of the business lifecycle if it has been
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demonstrated that your idea will generate sales and profits. It’s time to create a
strategy for how sales will increase and how you’ll scale up operations to satisfy this
demand.
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Growing significantly while defending your intellectual property from rivals is what it
means to grow. It may seem straightforward, but it’s anything but! Usually, taking a
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strategic direction needs a lot of thought, meticulous planning, and time.
You, the owner, manager, and founder, or you and a select group of people, such
as an executive team, must provide it. A plan should only be developed with a
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small group of people. It’s not something that can be successfully accomplished
democratically through negotiation and placation.
2. Hire the right people and looking after your team
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The correct hires and management are essential for corporate success. If you do it
well, you’ll realise how essential a team is to development. That’s because as your
company grows, you will depend more and more on your staff to: Manage client
connections and boost sales; ensure the efficient operation of the company’s core
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operations; Have ideas that advance both the internal operations of your company
and your product/service offerings.
3. Monitor margins and your cash position
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Always carefully compare your margins to your business budget on a regular basis
so that you may adjust prices or cut costs as needed. Consider the potential effects
of economic and political developments on your profitability as you make your future
plans. To make sure the company doesn’t run out of money, you should frequently
assess your cash status using the working capital formula.
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How to Set a Strategic Direction

The ability of strategic direction to orient the overarching purpose of your business
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is what gives it its significance. Think about your big-picture goal for starting a business,
or your vision. This might be as lofty as wanting to change the world for the better or
as pragmatic as wanting to make the most money with the least amount of work. Your
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mission statement should be reflected in your vision.
Next, think about your company’s goal, or how you’re going to actually carry out
your vision. There are probably some specifics about your goods and services in your
mission statement. For example, an auto mechanic might articulate a mission to keep
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its customers’ cars safe and mechanically sound, and a fair-trade importer might adopt
a mission to improve the quality of life for indigenous artisans by paying fair prices for
their offerings. Your mission is the “what” to your vision’s “why.”
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Figure: Strategic Direction according to ISO 9001
Source: https://advisera.com/wp-content/uploads//sites/3/2017/03/strategic-
direction-9001.jpg
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1.2.2 Mission and Vision Concept
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Figure : Concept of Mission and Vision

Source: https://i.pinimg.com/736x/37/7e/38/377e38994d3e76b2afdf513fa4d0fd44.
jpg
The basis for the strategic management is laid by the pyramid of strategic intent.
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The concept of strategic intent makes clear what an organisation stands for harvard
business review, 1989 described the idea in its infancy hamed and prahalad coined the
word strategic intent. A few aspects about strategic intent are as follows:
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◌◌ It is an obsession with a company, sometimes an obsession that is out of all
proportion to their talents and resources.
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◌◌ It provides the standard by which the organisation will gauge its development
and envisions a derived leadership position.
◌◌ It involves the following:
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◌◌ Making and Communicating a vision
◌◌ Designing a mission statement
◌◌ Describing the business
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◌◌ Setting objectives
Vision serves the purpose of stating what an organisation wishes to achieve in the
long run.
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Mission relates an organisation to society.
Business explains the business of an organisation in terms of customer needs,

customer groups and alternative technologies. r
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Objectives state what is to be achieved in a given time period.
The strategic intent concept also encompasses an active management process

that includes focusing the organisation’s attention on the essence of winning. The
concept of stretch and leverage is relevant in this context.
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Vision
It is at the top in the hierarchy of strategic intent. It is what the firm would ultimately
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like to become. A few definitions are as follows:
KOTTER description of something (an organisation, corporate culture, a business,

a technology, an activity) in the future. The definition itself is comprehensive and states
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clearly the futuristic position.
MILLER and DESS defined vision as the “category of intentions that are broad, all-
inclusive and forward thinking”
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The definition lays stress on the following:
(1) Broad and all inclusion purposes

(2) Vision is forward thinking process.
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A few important aspects regarding vision are as follows:
◌◌ It is more of a dream than articulated idea

◌◌ It is an aspiration of organisation. Organisation has to strive and exhert to
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achieve it.
◌◌ It is powerful motivator to action.

◌◌ Vision articulates the position of an organisation which it may attain in distant

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future.
Envisioning
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This is the process of creating vision. It is a difficult and complex task. A well-
conceived vision must have
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◌◌ Core Ideology
◌◌ Envisioned Future
Core Ideology will remain unchanged. It has the enduring character. It consists
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of core values and core purpose. Core values are essential tenets of an organisation.
Core purpose is related to the reasoning of the existence of organisation.
Envisioned Future will basically deal with following:
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o The long term objectives of the organisation.
o Clear description of articulated future.
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Advantages of Having a Vision
A few benefits accruing to an organisation having a vision are as follows:
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They foster experimentation.
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●● Vision promotes long term thinking
●● Visions foster risk taking.
●● They can be used for the benefit of people.
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●● They make organisations competitive, original and unique.

●● Good vision represent integrity.
●● They are inspiring and motivating to people working in organisation.
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Mission
The mission statements stage the role that organisation plays in society. It is one of
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the popular philosophical issue which is being looked into business mangers since last
two decades.
Definition
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A few definitions of mission are as follows:
HYNGER and Wheelen “purpose or reason for the organisation’s existence.
DAVID F. Harvey states “A mission provides the basis of awareness of a sense

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of purpose, the competitive environment, degree to which the firm’s mission fits its
capabilities and the opportunities which the government offers.
Thompson states mission as the “essential purpose of the organisation, concerning

particularly why it is in existence, the nature of the business it is in, and the customers it
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seeks to serve and satisfy.
The above definition reveals the following:

(i) It is the essential purpose of organisation

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(ii) It answers “why the organisation is in existence”.
(iii) It is the basis of awareness of a sense of purpose.
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(iv) It fits its capabilities and the opportunities which government offers.
Nature
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A few points regarding nature of mission statement are as follows.
◌◌ It gives social reasoning. It specifies the role which the organisation plays in
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society. It is the basic reason for existence.
◌◌ It is philosophical and visionary. It relates to top management values. It has
long term perspective.
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◌◌ It legitimises societal existence.
◌◌ It is stylistic objectives. It reflects corporate philosophy, identify, character and
image of organisation.
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Characteristics
In order to be effective, a mission statement should possess the following
characteristics.
i.
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A mission statement need to be attainable and practical. Unrealistic claims don’t
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inspire people. Goals should be created in a way that they might become attainable.
ii. It should be just the right amount of both broad and narrow. If it’s too broad, it will
lose any meaning. A mission statement that is more limited limits the organisation’s
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actions. A clear mission statement is necessary. A mission statement shouldn’t be

vague
iii. Clearness is necessary for action. Statements that are very philosophical do not
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provide clarity.
iv. A mission statement ought to be clear. It will have no effect if it is not distinct. The
impact of copied mission statements is nonexistent.
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v. It ought to be connected to society. The organisation’s long-term vision will be

better developed if it is connected to society. It shouldn’t be static
vi. Consider dynamic factors in order to adapt to an environment that is constantly
changing.
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vii. It ought to inspire members of the organisation and society as a whole. The mission
statement of the organisation can motivate the staff.
viii. The mission statement needs to describe how goals will be achieved. The mission
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will be accomplished using the hints as a guide.
Examples of Mission Statement

A few examples of mission statement (academically not accepted) are as follows:
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India Today “The complete new magazine”

Bajaj Auto, “Value for Money for Years”

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HCL, “To be a world class Competitor”
HMT, “Timekeepers of the Nation”
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Some experts argue that these are the publicity slogans. They are not mission
statements. A few other examples are as follows:
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Ranbaxy Industries “To become a research based international Pharmaceuticals
Company”.
Eicher Consultancy “To make India an economic power in the lifetime, about 10 to
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15 years, of its founding senior managers.”
Formulation of Mission Statements
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The following sources are used to create the mission statements:
i) Projections of national priorities in plan documents and industrial policy

pronouncements.
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(ii) The company’s philosophy as it has evolved throughout time.
(iii) Major strategists have the vision to create mission statements
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(iv) Consultants can be employed if necessary.
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1.2.3 Corporate Governance – Meaning
Definition of terms
Corporate Governance
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The work governance is derived from the Latin verb gubernare which means to steer
(ferkins, McDonald and Shilbury, 2008).
The traditional definition of corporate governance given in the Cardbury Report and
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Recomme ndations states that: Corporate governance is the system by which business
are derected and controlled (Cadbury, 1992).
Figure: Meaning of Corporate Governance
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Source: https://image3.slideserve.com/6253170/definition-of-terms-l.jpg
Corporate governance refers to the set of guidelines, customs, and procedures

that regulate and control a business. Corporate governance generally entails striking
a balance between the needs of all of a company’s various stakeholders, including
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shareholders, senior management, clients, suppliers, financiers, the government,

and the local community. Corporate governance includes almost every aspect of
management, from action plans and internal controls to performance measurement and
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corporate transparency, since it also offers the foundation for achieving a company’s
goals.
Key Takeaways
●● The key factor determining corporate governance is the board of directors of a
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corporation, which is the system of laws, customs, and procedures used to lead
and administer a firm.

●● Poor corporate governance can raise questions about how a business is run and if
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it will ultimately be profitable.
●● Environmental awareness, moral conduct, business strategy, pay equity, and risk
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management are all aspects of corporate governance.
●● Accountability, openness, fairness, and responsibility are the fundamental tenets
of corporate governance.
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Figure: Elaboration of Good Corporate Governance
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Source: https://bbamantra.com/wp-content/uploads/2016/08/Corporate-
governance.jpg
Understanding Corporate Governance

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The term “governance” especially refers to the system of regulations, checks,

policies, and resolutions established to direct company action. Shareholders and
proxy advisors are significant stakeholders that indirectly influence governance, but
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they are not instances of governance in and of themselves. The board of directors is
crucial to governance, and its decisions can have a significant impact on how much
stock is worth. Investors value corporate governance because it demonstrates a
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company’s direction and commercial integrity. Building confidence with investors and
the community is facilitated by sound corporate governance. As a result, corporate
governance encourages financial viability by giving market players a chance to invest
for the long term.
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An important aspect of community and investor relations is communicating

a company’s corporate governance. For instance, Apple Inc.’s investor relations
website lists the company’s executive team, board of directors, and corporate
governance structure, along with committee charters and other governance papers
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including bylaws, stock ownership policies, and articles of incorporation. The majority
of businesses aim for excellent corporate governance. For many shareholders, a
company’s profitability is insufficient; it must also exhibit good corporate citizenship
through consideration for the environment, moral behaviour, and effective corporate
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governance procedures. Incentives for shareholders, directors, and officials are

aligned under transparent rules and regulations that are the result of good corporate
governance.

Corporate Governance and the Board of Directors

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The most direct stakeholder influencing corporate governance is the board
of directors. Directors serve as the company’s shareholders and are chosen by
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shareholders or selected by other board members.
Important choices including executive salary, dividend policy, and the nomination
of corporate officers are up to the board. In certain circumstances, such as when
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shareholder votes demand certain social or environmental concerns be addressed, a
board’s tasks go beyond financial optimization. A board of directors ought to be made
up of a varied range of people, including both those with commercial expertise and
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understanding and those who can offer an outsider’s perspective on the organisation.
Boards frequently consist of both internal and external members. Major

shareholders, founders, and executives are considered insiders. Independent
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directors are chosen due to their track record of managing or leading other significant
organisations, but they do not have the insider connections of insiders.
Independents are regarded as being beneficial to governance since they assist
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balance shareholder interests with insiders’ interests and reduce the concentration of
power. The corporate governance policies of the corporation must take into account the
corporate strategy, risk management, accountability, transparency, and ethical business
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practises, according to the board of directors.
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Examples of Corporate Governance
Volkswagen AG
A company’s reliability, integrity, or duty to shareholders may all be questioned by

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poor corporate governance, which may have an impact on the firm’s financial health.
Scandals like the one that rocked Volkswagen AG beginning in September 2015 can
be caused by tolerance for or encouragement of criminal activity. As the “Dieselgate”
scandal’s facts emerged, it became clear that the manufacturer had been manipulating
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American and European pollution test results for years by purposefully and methodically
rigging engine emission devices in its vehicles. In the days after the scandal broke,
Volkswagen’s stock lost over half of its worth, and its global sales dropped 4.5% in the
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first full month that followed the announcement.
The board structure of VW was a factor in how the emissions rigging occurred
and went undetected for so long. VW has a two-tier board structure, consisting of a
management board and a supervisory board, as opposed to the typical one-tier
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board structure found in most businesses. The supervisory board was supposed to
oversee management and give its approval to corporate decisions, but it lacked the
independence and power to fulfil these responsibilities.
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The supervisory board comprised a large portion of shareholders. Ninety percent of

shareholder voting rights were controlled by members of the supervisory board. There
was no real independent supervisor; shareholders were in control of the supervisory
board, which canceled out the purpose of the supervisory board, which was to oversee
management and employees and how they operate within the company, which of
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course, included rigging emissions.

Enron and Worldcom

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Concern from the public and the government regarding corporate governance ebbs
and flows. However, frequently, widely reported allegations of corporate wrongdoing
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rekindle interest in the topic. For instance, corporate governance became a crucial
issue in the United States at the beginning of the twenty-first century when dishonest
business practises caused high-profile firms like Enron and WorldCom to go bankrupt.
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Enron had a problem because its board of directors allowed the company’s chief
financial officer (CFO), Andrew Fastow, to form independent, private partnerships to
conduct business with Enron, in violation of numerous conflict-of-interest laws. In reality,
Enron exploited these private partnerships to conceal its liabilities and debts, which
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would have severely decreased the company’s revenues.
What happened at Enron was clearly a lack of corporate governance that should
have prevented the creation of these entities that hid the losses. The company also
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had a corporate atmosphere that had dishonest people at the top (Fastow) down
to its traders who made illegal moves in the markets. Both the Enron and Worldcom
scandals resulted in the 2002 passage of the Sarbanes-Oxley Act, which imposed more
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stringent recordkeeping requirements on companies, along with stiff criminal penalties
for violating them and other securities laws. The aim was to restore public confidence in
public companies and how they operate.
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It’s common to hear of bad corporate governance examples, mainly because
it is the reason some companies blow up and end up in the news. It’s rare to hear
of companies with good corporate governance because it is the good corporate
governance that keeps them out of the news as no scandal has occurred. PepsiCo
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is one business that often attempts to upgrade its good corporate governance
practises. PepsiCo used investor suggestions when creating its 2020 proxy statement,
concentrating on six areas:
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◌◌ The makeup of the board, its diversity, how it is refreshed, and its leadership
structure
◌◌ Issues pertaining to long-term planning, company goals, and sustainability
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◌◌ Human capital management, ethical company culture, and good governance

◌◌ Analysis and discussion of compensation; • Participation of shareholders and
other stakeholders
A comparison graphic showing the current leadership structure, which includes
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a combined chair and CEO as well as an independent presiding director, and a link
between the compensation of the company’s “Winning With Purpose” vision and
changes to the executive compensation programme were both included by the
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company in its proxy statement.

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1.2.4 Role of the Board of Directors

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Figure : Meaning of Board of Directors
Source : https://cdn.wallstreetmojo.com/wp-content/uploads/2019/10/Board-of-
Directors-1.jpg
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Despite their differences, boards and management might agree that a strategic
plan is necessary. They occasionally disagree about how to define the board’s
and management’s roles in creating and carrying out the strategic plan. Who truly
determines the strategy is the key query. Some people think the board decides it, while
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others think the board waits for management to decide it before approving it. The exact
procedure varies greatly from company to firm. The key is to guarantee that the process
is followed and that everyone is in agreement. The most secure method for boards
and managers to work on the company’s strategic plan is through board management
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software and the expectations for the role of the board of directors in strategic
management.
Clarifying the Board’s Role in Strategic Management

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Where each of them draws the line between managing strategy and managing
the company concerns both board directors and managers equally. Strategic planning
eventually falls under the purview of the board. When company performance is poor,
they have come under intense pressure to be prepared with answers about strategy
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for shareholders, regulators, and others. Another issue is whether and how much
boards should rely on outside specialists to help them analyse business strategy.
Independent analysis from outside experts can support top management challenges
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by establishing independence. Others contend that if boards must perform all of this
labour, what function does the CEO play and whether or not that individual is qualified
for the position. Another school of thinking holds that major events like a change in
the CEO, a significant investment opportunity, a potential acquisition, a drop in sales,
or an unwanted takeover offer should be the main triggers for boards to get involved
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in strategic planning. Boards may decide to conduct strategic planning retreats and
include it heavily in the CEO’s performance review.

Senior executives, including CEOs, should have a strong understanding of both the
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current state of the business and its prospective future state. CEOs are typically the
best knowledgeable about how to handle difficulties associated with strategic planning
because of their extensive involvement in the day-to-day activities of the organisation.
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If we look at best practices, we can see that board directors are responsible for setting
the ultimate direction for their corporations. Their responsibility also lies in reviewing,
assessing, understanding, and approving specific strategic projects and plans. In their
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role in strategic planning, board directors need to be able to assess and understand the
issues, opportunities, and risks that drive performance in the current market.
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Strategic Activities for Boards
There are numerous methods for boards to engage in strategy-related tasks
without micromanaging the CEO or going beyond their authority. The strategic strategy
should be in line with the company’s vision, so those two subjects need to be discussed
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at least occasionally a year. Board directors should gather and assess information on
the industrial environment, the nature of the competitors, and the business models
in advance of a board debate about strategy. In order to help establish the future
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allocation of resources and capabilities, boards can also create a platform for strategic
decision-making that outlines the basics of the company portfolio and the dominant
business model.
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The board’s role in strategic planning entails identifying priorities, establishing
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goals and objectives, finding resources, and allocating funds to support the decisions
that need to be made around strategic planning. The board is also responsible for
monitoring the execution of the strategic plan. This requires the board to oversee the
implementation of the strategic plan. As the plan progresses, boards may need to revisit
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the allocation of funds, as well as consider the impact of acquisitions and divestitures.
Special Situations that Require Substantial Board Attention

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The board should have complete confidence in the strategic plan and the
direction of the business after extensive data collection, analysis, and collaboration
with management. Boards may need to take a more active role as more significant
issues arise that could affect the strategic plan. There may be issues that force boards
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to reevaluate their choices regarding debt and equity that have an impact on the
capital structure. Acquisitions, mergers, and takeovers can all play a significant role in
corporate strategy. These significant occurrences carry both significant dangers for the
business and its owners as well as potential chances for outside expansion.
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Choosing Metrics to Monitor Strategy Implementation

In order to monitor the various aspects of the business, including finances,
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operations, organisational problems, goods, sales, marketing, and vendors, boards

have a number of measurement options at their disposal. Corporate strategy
development is a difficult process. The CEO’s position in the process is directly related
to the board of directors’ function in strategic management. Using a highly secure
electronic platform like BoardEffect, both parties must be able to collaborate and
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communicate regarding strategic planning. The ideal digital instrument for boards and
their management staff to establish balance in the development of short- and long-

term strategic plans is board management software. The portal provides a collaborative
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online space for drawing up strategy plans where they can be challenged and tested.
The final process results in a detailed plan that is likely to get a final, positive stamp of
approval from the board.
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The earlier boards get involved in the strategic planning process, the easier it will
be for them to monitor the plan’s development and identify any changes in risk as it
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develops. The strategic plan will need to be fully explained to managers, and boards
will need to be involved if situations arise that call for their expertise. In the best of
circumstances, the strategic plan will outperform its expectations.
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1.2.5 Corporate Social Responsibility
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Figure: Corporate Social Responsibility

Source: https://www.thegivingmachine.co.uk/media/zhcdx4g0/corporate-social-
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responsibility.png
Corporate social responsibility, or CSR, is a type of corporate self-regulation

incorporated into a company model. It is also known as corporate conscience,
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corporate citizenship, social performance, or sustainable responsible business/

Responsible Business. A firm monitors and guarantees that it is acting in accordance
with the letter and spirit of the law, ethical standards, and international norms through
the use of a CSR policy, which serves as an integrated, self-regulating system.
According to some theories, a company’s CSR efforts go beyond legal requirements
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and involve “activities that appear to serve some social good, beyond the interests
of the organisation and what is required by law.” CSR is a process with the aim to
embrace responsibility for the company’s actions and encourage a positive impact
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through its activities on the environment, consumers, employees, communities,

stakeholders and all other members of the public sphere who may also be considered
as stakeholders.
The term “corporate social responsibility” became popular in the 1960s and has
remained a term used indiscriminately by many to cover legal and moral responsibility
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more narrowly construed. Proponents argue that corporations make more long term
profits by operating with a perspective, while critics argue that CSR distracts from

the economic role of businesses. McWilliams and Siegel’s article (2000) published in
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Strategic Management Journal, cited by over 1000 academics, compared existing
econometric studies of the relationship between social and financial performance. They
concluded that the contradictory results of previous studies reporting positive, negative,
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and neutral financial impact, were due to flawed empirical analysis. McWilliams and
Siegel demonstrated that when the model is properly specified; that is, when you
control for investment in Research and Development, an important determinant of
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financial performance, CSR has a neutral impact on financial outcomes. In his widely
cited book entitled Misguided Virtue: False Notions of Corporate Social Responsibility
(2001) David Henderson argued forcefully against the way in which CSR broke from
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traditional corporate value-setting. He questioned the “lofty” and sometimes “unrealistic
expectations” in CSR.
Some argue that CSR is merely window-dressing, or an attempt to pre-empt the
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role of governments as a watchdog over powerful multinational corporations. Political
sociologists became interested in CSR in the context of theories of globalization, neo-
liberalism, and late capitalism. Adopting a critical approach, sociologists emphasize
CSR as a form of capitalist legitimacy and in particular point out that what has begun
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as a social movement against uninhibited corporate power has been co-opted by and
transformed by corporations into a ‘business model’ and a ‘risk management’ device,
often with questionable results CSR is titled to aid an organisation’s mission as well as
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a guide to what the company stands for and will uphold to its consumers.
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One type of applied ethics is development business ethics, which looks at moral
or ethical dilemmas that could occur in a corporate setting. The accepted international
standard for CSR is ISO 26000. Organisations in the public sector, like the United
Nations, follow the triple bottom line (TBL). It is commonly acknowledged that CSR
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follows the same principles, despite the absence of a legal law. The Principles for
Responsible Investment are a set of rules created by the UN for investment entities.
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Why CSR is Important

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Figure: Corporate Social Responsibility

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There are many reasons for a company to embrace CSR practices.

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1. It enhances how customers view your brand.
It’s becoming more and more crucial for businesses to project an image of social
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responsibility. When selecting a brand or business, consumers, employees, and
stakeholders place a high value on CSR. They also hold businesses accountable
for bringing about social change through their values, operations, and profits.
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The success of your business depends on how the public perceives it, according
to Passion Lilie founder and lead designer Katie Schmidt. “You may establish a
reputation for your firm as being socially conscious by creating a positive image
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that you believe in.” If your company wants to stand out from the competitors, it
must show the public that it is a force for good. Promoting and drawing attention to
socially important issues is a terrific way for your company to build brand value and
stay top-of-mind.
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2. It draws and keeps workers.
Businesses that give back are appealing to more than just their customers.
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Sustainability strategy, according to Susan Cooney, head of global diversity and
inclusion at Symantec, is a significant consideration in where today’s best talent
chooses to work. The triple bottom line—people, planet, and revenue—is what the
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next generation of workers are looking for in an employer, she claimed. “Corporate
revenue has gotten stronger since the recession ended. Businesses are urged to
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put that increased profit into programs that give back.”
3. It makes you more attractive to investors.
Your business will undoubtedly gain more credibility with both present and potential
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investors if you can demonstrate a well-developed CSR programme and efforts.

Investors are playing an increasingly important role as essential stakeholders in
corporate social responsibility, according to CECP’s authoritative 2021 Giving in
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Numbers report. Nearly 80% of the companies who responded to the study were
willing to share information and take into account their viewpoints on sustainability.
Investors are holding companies accountable for their social responsibility in the
same way that consumers are.
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A company that takes CSR seriously also conveys to partners and investors that it
is interested in both short-term and long-term prosperity. Environmental, social, and
governance (ESG) measures that assist external analysts with quantification go
hand in hand with CSR the company’s social efforts, and becomes a key factor for
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investors’ consideration and continued interest.
Examples of CSR companies

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If you’re looking for CSR inspiration for your business, here are six companies
practicing corporate social responsibility on a large scale.
●● LEGO: The toy firm has put millions of dollars into tackling climate change and
decreasing waste, which makes it more appealing to investors. LEGO makes an
effort to be ecologically friendly, using less packaging, sustainable materials, and
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investing in renewable energy sources.

●● TOMS: To help organisations that promote both physical and mental health as
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well as educational possibilities, TOMS contributes one-third of its net income.
All philanthropic contributions made during the epidemic were routed through the
TOMS COVID-19 Global Giving Fund.
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●● Johnson & Johnson: The company is committed to minimising its environmental
impact and has made investments in alternative energy sources. Johnson &
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Johnson aims to provide communities with access to clean, safe water on a global
scale.
●● Starbucks: In an effort to diversify its staff, the multinational coffee chain has
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adopted a socially responsible hiring procedure. Its efforts are concentrated on
employing more refugees, young individuals seeking new jobs, and veterans.
●● Google: By making investments in sustainable buildings and renewable energy
sources, Google has shown its dedication to the environment. Sundar Pichai, the
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CEO, is renowned for taking positions on several social problems.
●● Pfizer: The pharmaceutical business places a strong emphasis on corporate
responsibility, which is reflected in its healthcare programmes, which include
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raising awareness of non-infectious diseases and giving mothers and children who
are in need of medical care access to care.
1.2.6 Ethical Decision Making r

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An approach to decision-making in business known as ethical decision-making

promotes moral norms over economic ones as a set of guidelines. Businesses that
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emphasise ethical behaviour may take into account a number of ethical principles, such
as how their choices affect the organisation, their employees, and the larger community
or globe. Many ethical quandaries in business measure these factors against economic
growth. Common ethical issues in company include environmental concerns, employee
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well-being, operational transparency, product honesty, and consumer pleasure.
To aid in guiding ethical decision-making, ethics philosophers have developed

hundreds of models, each with a unique set of considerations and worries. For
instance, while non-consequentialist theories (such as the duty-based approach or the
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rights approach) place more emphasis on the decision-intentions maker’s or ethical

obligations, consequentialist theories (like the utilitarian approach or the common good
approach) focus primarily on the outcomes of decisions.
How to Make Ethical Decisions

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Though there is not a single framework for making ethical decisions, each ethical
decision-making model incorporates these four core steps:
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1. List the details. You must first confirm that you are in possession of all the information
in order to make an ethical decision. This is making decisions based on facts,
actions, and confirmed occurrences rather than feelings, intuition, past experiences,
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or emotions. Consider your ethical awareness as well; analyse the matter from
all angles to see whether you are overlooking any important viewpoints. When
determining the facts of a case, you can discover that it’s preferable to convene a
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meeting with all the involved parties so that you can make a decision as a group.
2. Present every alternative. Outline all potential possibilities for the business decision
once you know the situation’s data. No matter how morally questionable you may
think a particular choice is, be open and truthful about it. Additionally, be conscious
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of any situational elements you might have missed and take some time to come up
with novel answers.
3. Group choices based on implication. Consider the repercussions or ramifications of
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each option once you have listed all of your options in the ethical decision-making
process. Think about the following inquiries: Which alternatives benefit (or do the
most good) for the most number of people? Which alternatives result in the fewest
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adverse effects (or cause the least harm) for the greatest number of people? Which
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solutions are most or least advantageous to your business? Which choices align
with the principles of your business? Which choices align with your ethical standards
or personal values? Which choices do you think are morally right and which are
unethical? If not, why not?
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4. Consider all of your options. Decide which ethical values are most essential to
your firm and which are least important after carefully weighing the ramifications of
each choice. This will serve as your framework for making ethical decisions. Ethical
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decisions take into account elements like the common good, integrity, openness,
justice and equality, rights, and duty. Choose the ethical system that is best for you
and your business, and then take the most morally sound course of action possible.
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Ethical Frameworks
Ethical frameworks are designed and implemented to ensure that the choices
and actions of an organisation or company reflect and uphold its ethics. Rather than
providing step-by-step processes, frameworks outline the key aspects of ethical
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solutions to routine problems. The following frameworks provide approaches to unique

problems that may require innovative solutions.
1. Virtue Ethi
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Instead than focusing on a formalised system of moral laws, virtue ethics is more
interested in the purposeful development of human morality. Business executives
who make decisions based on virtue ethics should be conscious of how their choices
affect the culture and values of their company. Using personal qualities like integrity,
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honesty, empathy, and discipline, virtue ethics may assist establish relationships
with staff members, clients, stakeholders, and the community in a corporate context.

Then, these character traits frequently come into contact with professional abilities
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and financial goals.
Sadly, although having a straightforward idea, virtue ethics may be challenging to
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put into practise. The framework may overlook how much thought and reasoning
must go into moral character because there is no weighing moral concerns.
2. Consequentialist Theory
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A moral framework for determining an ethical course of action based on outcomes
is provided by the consequentialist theory. The outcomes are logically taken into
consideration before making a choice. The ethical decision-making framework
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identifies potential activities that could be taken after the intended outcome has
been selected. The aim is to select an action plan that results in the greatest
positive results.The consequentialist view is morally advantageous as a result of
this process. It offers definite transparency because actions are in line with the
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objective that reflects ethical reflection. Because it optimises favourable effects for
some and avoids unfavourable consequences for others, the utilitarian method is
effective when making decisions that have a significant impact on vast populations
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of people.
There are drawbacks to this hypothesis, though. It might be challenging to predict
the effects of actions because of unforeseen situations. These uncertainties could
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have the opposite effect and cause more harm than good. The inference is that the
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goal justifies the means, which may lead to sacrificing the happiness of the minority
in favour of the greater good. These choices in business management can affect a
company’s financial health and longevity, even though they don’t always hurt vast
populations of people. It is unethical for a business to mislead customers while
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promoting its goods or services, and the effects on customers’ purchasing decisions
may last a long time.
Identify-Consider-Act-Reflect
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This four-step framework is designed for managers to address situations with

variables that may not line up with the day-to-day challenges facing an organisation.
●● Identify: The first step in determining the appropriate course of action is to analyse
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each event from an ethical perspective. In order to do this, a series of questions

must be asked. For instance, what moral standards are at risk? Or, who exactly
will be impacted by these choices? What are the crucial details, and where are the
conflicts of interest?
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●● Consider: Business executives should then take some time to consider their
decision-making process before proceeding. They can think about several angles,
come up with different answers, and deal with negative influences.
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●● Take action: This involves carrying out the decisions made and, if more authority is
needed, elevating the situation to the proper management level.
●● Reflect: Decision-makers are urged to consider the overall effects of their choices.
What, in essence, can they learn from this procedure? When making future
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business decisions, this will help to better grasp the team members’ and leaders’
strengths and shortcomings.

Leadership, ethics, and your education

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●● Business executives can determine the best courses of action while adhering to
their basic values and beliefs by using ethical decision-making frameworks. They
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can use these frameworks to encourage more strategic, sustainable, and fair
decision-making, as well as to spread an ethical vision throughout their firm.
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Figure: Ethical Decision Making Model

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1.2.7 Principles of Ethical Decision Making

The principles of ethical decision-making are considerations taken into account
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during dilemmas and can be used to solve conflicting issues. They include the following:
●● Autonomy: Respect for a person’s freedom and self-determination is referred to as

autonomy. According to this tenet, everyone ought to be free to decide what to do.
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●● Justice: Justice refers to the significance of treating people fairly while keeping
in mind that each person is unique and should be treated as such in order to
maximise their potential for success or gain.
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●● Beneficence: Beneficence states that a moral choice should try to advance the
welfare of others. This might also mean acting proactively to safeguard others and,
whenever feasible, prevent harm.
●● Nonmaleficence: The idea of “do no harm” is known as nonmaleficence. As the
foundation of the ethical decision-making process, an ethical decision should aim
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to harm others as little as possible.

●● Fidelity: Fidelity refers to trust and faith. When making moral decisions, one should
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always keep their word and show loyalty to people who will be impacted by their
choices.
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1.2.8 Ethical Decision Making Models
Models for making ethical decisions offer a proposed method for reasoning through
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and organising the solution to ethical conundrums. Health care professionals can utilise
an ethical decision-making model as a tool to increase their capacity for moral reflection
and ethical decision-making. The literature on ethics presents a variety of models, the
most of which are comparable in structure and content. Each model aims to give the
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healthcare professional a framework for selecting the optimal course of action in a
certain circumstance.
The majority of these models employ principle-based reasoning, a strategy
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principally inspired by the philosophical writings of Beauchamp and Childress. These
models take ethical norms, duties, and values into account. They promote using tools
like published research, clinical data, and speaking with dental colleagues. Whether in
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a one-person private practice, a big clinical setting, or dental advocacy groups, some of
these approaches enable rigorous reasoning through the structure of a decision model.
Some of these models incorporate four, five, or seven steps for solving difficulties.
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The model presented in this module is a straightforward six-step procedure that
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was taken from the decision-making literature and used to dental and dental hygiene
students in a combined ethics course starting in the early 1990s. It was interpreted
by Atchison and Beemsterboer. It is a deliberative strategy founded on theory and
principle.
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Making decisions is a dynamic process that changes as new information becomes

available. Dentists and dental hygienists are presented with a variety of problems to
think about, and before making a choice, they must take into account both the code of
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ethics and their personal values and views. The review process that takes place when
a practitioner is presented with a clinical or scientific problem is similar to that which
occurs in ethical dilemmas. The health care practitioner will be able to make the right
choice if they pay close attention to and conduct a methodical study of the available
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data, facts, and information. The decision-making model is applied, providing a tool for
use in the workplace.
Six-Step Decision-making Model

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1. Identify the ethical conundrum or issue. Step 1 is the most important step since it
is necessary for moving through the next steps that an issue be recognised. Many
circumstances are just never considered to be ethical issues or conundrums. Once
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the issue has been identified, the decision-maker must concisely and clearly express
the ethical dilemma while taking into account all essential components of the issue.
If there is no conflict between the principles involved in the ethical situation, it is just
a matter of right and wrong and no formal process for reaching ethical decisions is
necessary. If there is no doubt as to whether something is right or wrong, step 2 is
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not required.
2. Amass Information. To make an informed choice, the decision-maker must gather

information. There may be more than one source for this information, which may
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be accurate data on how the incident actually played out. Here, details like the
patient’s medical and/or dental history, diagnosis, and prognosis may be relevant.
Are the therapy goals realistic? Is the patient capable, or is a surrogate present? It
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is necessary to consider all of the parties’ values, including the healthcare providers.
3. List your options. Following the collection of the relevant data, one can go on to the
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third step, which is brainstorming to come up with as many potential solutions as
feasible. Frequently, the best choice is not the one that immediately springs to mind.
There is also a propensity to believe that a question can only have one solution. In
order to find potential other solutions to the issue, we must first pause and consider
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the situation from all possible viewpoints. To see that there are frequently multiple
solutions to an issue requires having an open, enlightened mind.
4. Use the ethical guidelines to evaluate the options. Emphasis should be placed on
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the moral norms and notions of autonomy, beneficence, nonmaleficence, justice,
and truth (paternalism, confidentiality, and informed consent). Any ethical choice
will typically involve one or more of these. By creating a list of advantages and
disadvantages, explain how each option would impact the ethical concept or norm.
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Show alternatives in the pro column that preserve or uphold each value or concept.
Indicate how a potential option could contravene the principle or value in the contra
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column. Do this for every choice. You can identify which ethical values are at odds
with one another in this case by using this procedure. For help, see the relevant
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code of ethics. Often, talking with a reliable coworker can help one develop a more
comprehensive understanding of the problem and possible solutions
5. Make a choice. When the advantages and disadvantages of each option are clear
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a rational framework for choosing is readily obvious. The next step is to weigh each
choice individually, paying close attention to the advantages and disadvantages
of each choice. The physician must next balance the gravity of the disadvantages
while keeping in mind that, as a professional, he or she is required to put the patient’s
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interests first. The appropriate course of action in an ethical problem is frequently

clear just by carefully weighing the available options. The practitioner should review
each principle against the choice before putting it into practice to ensure that it
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stands up to this assessment.

6. Put the decision into action. Making use of the decision that has been made is the
last step. If no action is done, the decision-making process will have been ineffective.
Here is where moral fortitude might be needed. This stage is frequently skipped,
which results in many good decisions never being implemented. Never assume that
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something you do means you approve of the way things are.
Other Models for Making Ethical Decisions

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The Jonsen or Four Box Approach is a popular model for making ethical decisions
in medicine. Drs. Albert Jonsen, Mark Siegler, and William Winslade created this
approach, which is very useful when handling complicated medical issues. According to
the authors, this framework is an ethics workup comparable to the history and physical
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when evaluating a patient for the first time. The pertinent information and questions
are arranged into four domains using this method of organisation and display. Medical

indications, patient preferences, quality of life, and environmental elements are the four
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boxes, quadrants, or paradigms.
Medical Indications – Autonomy, Patient Preferences – Autonomy
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Beneficence
C o n s i d e r t h e m e d i c a l c o n d i t i o n , Does the patient have capacity? What are the
diagnosis, prognosis, interventions. patients’ wishes?
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Q u a l i t y o f L i f e – A u t o n o m y, Contextual Features – Justice
Nonmaleficence, Veracity
Consider the patient’s quality of life from What are the social, cultural, legal, economic
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his/her view. and institutional circumstances?
Assessing the importance of facts, opinions, and circumstances in light of complex

ethical issues is a challenging and perplexing task. This is what an ethical decision-
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making model framework can provide the clinician – an approach to problem solving.
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Case Study
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Case Example on Corporate Social Responsibility
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Starbucks is the world’s largest and most popular coffee company. Since the
beginning, this premier cafe aimed to deliver the world’s finest fresh-roasted coffee.
Today the company dominates the industry and has created a brand that is tantamount
with loyalty, integrity and proven longevity. Starbucks is not just a name, but a culture.
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It is clear that Howard Shultz, the CEO of Starbucks, is cognizant of the
significance of corporate social responsibility. Every business, even Starbucks, has
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issues they can address and make improvements in. Starbucks has recently done a
terrific job of highlighting the value of its employees to the business. They have gone
above and above to make the workplace better for everyone while also committing to
each and every employee. Starbucks must be careful with their decisions and how they
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effect their public character because ethical and unethical behaviour are always hot
topics for the media.
Starbucks Corporation’s dedication to the environment, commitment to its workers,
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commitment to its customers, discussions of ethical and unethical business practises,
and Starbucks commitment and reaction to shareholders are all covered by its
corporate social responsibility.
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Commitment to the Environment
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Starbucks has demonstrated corporate social responsibility in the first place by
being environmentally conscious. With some encouragement from the NGO, Starbucks’
first priority was to increase the availability of Fair Trade coffee in order to improve the
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environment. This means that Starbucks will try to only purchase coffee that is grown
and traded in a responsible manner. Responsible coffee production benefits the farmers
as well as the environment. Coffee that is produced responsibly uses less water and
energy on the plantations. This results in higher overall expenditures for the business,
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but the environmental benefits are worthwhile. This choice helps Starbucks maintain its
clean image, which is advantageous for both the company and the environment.
Going “green” is another option for businesses to directly benefit the environment
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through their stores. In Manhattan, they made their first attempt to create a green store.
Starbucks decided to update a 15-year-old establishment. In this restoration, newer,
more energy-efficient equipment was installed in place of the old. Plaques outlining the
new green features and how they work were posted all over the store to inform the
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public. This brand-new Manhattan store now uses recycled and recyclable products
and conserves energy, water, and materials. Starbucks has committed to making each
of the twelve stores it plans to remodel LEED-certified, which stands for Leader in
Energy and Environmental Design. LEED enhances performance in terms of emission
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reduction, water efficiency, and energy savings. Due to the higher initial cost of
environmentally friendly appliances, many individuals don’t consider them. According to
Starbucks, the long-term benefits of turning green far surpass the initial expense. With
any luck, these fresh design cues will benefit the environment and put Starbucks ahead
of the competition.
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Commitment to Consumers
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Starbucks’ dedication to customers is how they have demonstrated corporate
social responsibility in a second way. Knowing your target market’s demographics is the
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greatest method to satisfy their needs. They discovered the importance of persons with
disabilities after studying the demographics of Starbucks customers. The business is
working to make its stores more accessible for consumers with impairments. Among
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the modifications are decreasing counter height to make ordering easier for wheelchair
users, constructing at least one handicap entrance, including disability etiquette in
employee handbooks, educating staff members about disabilities, and joining the
National Business Disability Council. Starbucks has access to resumes of persons with
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disabilities via to their membership in the National Business Disability Council.
Cutting expenses and maintaining devoted customers are two further ways
Starbucks has demonstrated its devotion to the consumer. Starbucks made the decision
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to offer a loyalty card to regular, devoted consumers. Once a customer obtains this
card, they are offered rewards and promotions for sticking with them and visiting their
stores frequently. Promotions for returning customers include complimentary flavour
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shots and discounted drinks. Additionally, Starbucks felt that lower costs were essential
given the state of the economy. They were able to offer their consumers lower costs by
streamlining their business procedures. For banana bread, they utilise just one recipe
as opposed to eleven!
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Also, it doesn’t stop there! Starbucks acknowledged that social responsibility
included taking care of oneself. They introduced “thin” versions of the majority of drinks
while retaining the mouthwatering flavours in order to encourage better living. For
instance, whereas the original vanilla latte contains 190 calories, the thin version has
just 90. Starbucks has started selling low-calorie snacks because they no longer only
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sell beverages. There were also nutrition facts accessible for the drinks and snacks.
Payroll and HR administration outsourcing was another significant approach to

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save costs. Starbucks is able to offer perks to more employees because they have built
a global platform for its administrative system. Additionally, they have more money to
spend on winning over clients rather than on a compensation plan.
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Commitment and Response to Shareholders

Starbucks has shown its dedication and responsiveness to shareholder needs in
part by providing them with generous quantities. Starbucks implies by using the term
“significant parts” that they intend to pay dividends to shareholders of at least 35%
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of net profits. Paying large dividends to shareholders assures them of the business’s
financial stability. They also intend to buy an additional 15 million shares of stock, which
should draw in investors who prioritise high-performing equities.
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By publicly addressing the media about it, Starbucks demonstrated their dedication
to their stockholders. Starbucks had a fantastic tax break in 2004, but sadly, the media
labelled them as “money grubbing.” Their CEO, Howard Shultz, made the choice to
enter politics and communicate with Washington about the significance of increasing
access to healthcare to the company. He wants all of America to be able to benefit from
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this investment, not just his stockholders who will see it.

Starbucks needed to make a significant turnaround if it wanted to remain

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competitive with McDonald’s and maintain a high payout to its shareholders. In North
America, growth was really stopped, but not in Japan. Shultz discovered that Japanese
people are increasingly drinking coffee. He revealed they intend to open “thousands of
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outlets” in the Japanese and Vietnamese markets as a way of reassuring shareholders.
Commitment to Employees
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Simply taking care of their employees is the first and most important method
Starbucks demonstrates its dedication to its workforce. For instance, they are aware
of how crucial compensation, stock options, and health care are to people in current
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economy. According to Starbucks’ rules, you are eligible for benefits and stock options
if you work 20 hours a week. These perks include contributions to the employee’s
401(k) plan and health insurance. Because they believe part-time employees are just as
valuable as full-time employees, Starbucks does not discriminate against them. Since
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Starbucks doesn’t operate on the same regular business hours as offices, part-time
employees assist with covering the irregular shifts.
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Treating staff members as persons rather than merely as employees number 500
out of 26,000 is another way Starbucks demonstrates its dedication to its workforce.
The CEO, Howard Shultz, makes a point of constantly keeping compassion and
humanity in mind. He resolved to continue showing consideration for employees since
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he remembered how much he enjoyed it when others showed concern for him when
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he first started working at Starbucks. According to Shultz, making a good impression is
crucial. He expresses his delight in having each new hire as a part of their team on the
first day of work, whether in person or through a video. His theory is that making a good
first impression on a new hire is similar to teaching a child good values. Through their
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growth, he feels each employee will keep in mind that the company does care about
them. Shultz wants people to know what he and the company stand for, and what they
are trying to accomplish.
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Ethical/Unethical Business Behavior

The final method Starbucks shows corporate social responsibility is by acting
ethically and occasionally in an immoral manner. Starbucks’ involvement with NGO’s
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and Fair Trade coffee is the first morally admirable thing they do. Even though it
negatively impacted company earnings, Starbucks recognised it was the proper thing to
do to buy predominantly Fair Trade coffee. They also understood that if they handled it
properly, everyone would gain—farmers, the environment, and their reputation included.
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Starbucks decided to partner with Jumpstart, a programme that provides kids

a head start in their education, in the fall of 2010. Starbucks has had a significant
beneficial impact on children in America through donations to literacy organisations and
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volunteer work with Jumpstart.
Of course, there are drawbacks as well as advantages. Starbucks is not the “ideal”
business, despite appearances. Starbucks decided to close 616 locations in 2008
because they were underperforming. Due to the chain’s violation of lease agreements,
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Starbucks had to fight numerous landlords in order to close thus many locations in one
year. Although Starbucks attempted to argue for rent reductions, several outlets were
forced to violate their leases. In addition to breaking lease agreements, Starbucks

was unable to expand as much as anticipated, which negatively impacted their

Notes
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potential landlords. To fix these problems, tenants typically will offer a buyout or find a
replacement tenant, but landlords are in no way forced to go with any of these options.
These efforts became extremely time consuming and costly, causing Starbucks to give
in
up on many lease agreements.
When put in the media spotlight, Starbucks’ ethical behaviour is a different tale.
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Due to their desire to re-release their previous logo in honour of their 35th anniversary,
there was a significant media outcry in 2008. Starbucks believes that the topless
mermaid in the previous coffee cup emblem is only a mythological creature and not a
sex symbol. Media sceptics argued that the creature’s modesty needed to be protected.
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This was absurd in Starbucks’ eyes. They made the decision to make the image more
modest by longer her hair to conceal her body and soften her facial expression in order
to put an end to the drama and appease the critics. Starbucks gathered in the middle to
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commemorate their 35th anniversary rather than ignoring the media’s worries.
1.3.2 Case Example on Ethical Decision Making
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McDonald’s Invests in Employee Skills and Animal Rights
Ending a labour shortage at McDonald’s could be achieved by showing concern for
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employees’ needs (NYSE: MCD). In response to a recent labour shortage in the US, the
fast-food juggernaut polled 6,500 employees to find out what was wrong, according to
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QSR Magazine.
When the poll revealed that younger employees lacked fundamental work skills
like accountability, cooperation, and customer service, McDonald’s made the decision
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to assist them. An education and career guidance programme called Archways to

Opportunity was introduced by the business.
For instance, McDonald’s now provides all employees with free academic and
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career counselling services. An advisor with a master’s degree will provide career
counselling to participants in the programme.
In March 2018, McDonald’s increased its employee tuition assistance by more than
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three times, from $700 to $2,500 annually. Additionally, according to a press release,
managers can now get up to $3,000 in yearly tuition support.
Additionally, after just 90 days of employment, the corporation now provides

employees with tuition aid. Additionally, workers at McDonald’s who put in as little as
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15 hours a week are eligible for financial aid for school. Finally, over the next five years,
McDonald’s aims to invest $150 million on staff education support.
McDonald’s treats its people well in general as well. By 2025, McDonald’s

)A
USA intends to only use cage-free eggs in their Egg McMuffins. According to a
news statement, the business intends to obtain two billion cage-free eggs annually.
McDonald’s is dedicated to both employees and animal rights.
McDonald’s declares a gross profit of $10.786 billion on revenues of $21.0252

billion in 2018, proving that ethics pay off there. But ethics aren’t boosting business
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growth. According to Stockrow’s projections, McDonald’s revenue growth shrank by

7.87% in 2018. If moral behaviour can help McDonald’s survive in a competitive fast-
Notes
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food business, only time will tell.
Summary
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●● Today’s top managers must navigate more intricate strategic issues than ever
before. Analysis of an organization’s internal and external surroundings, creation
and execution of its strategic plan, and strategic control are all components of
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strategic management.
●● These steps in the process are connected and frequently carried out concurrently
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in many organisations.
●● A firm’s intended strategy frequently needs to be modified before it is fully
implemented because of changes in organisational and/or environmental
circumstances. Significant changes in the environment may cause an
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organization’s realised strategy to diverge significantly from its intended strategy
because these changes are frequently difficult to forecast.
●● Perspectives like IO theory, resource-based theory, and contingency theory
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have all had an impact on the discipline of strategic management. Each of these
viewpoints has value and adds to our understanding of the area, despite the fact
that they are based on wildly divergent hypotheses about what causes great
performance. r
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●● The CEO is directly in charge of formulating strategy, but he or she also works with
a group of other people, such as the board of directors, vice presidents, and other
different managers.
●● A strategic choice is ultimately built from the input, choices, and actions of the
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entire senior management team.
Glossary
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1. Strategic Planning: Strategic Planning is “a process through which managers develop

and put into action plans targeted at maximising the achievement of strategic goals,
given the available external and internal variables.”
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2. Questioning Process: It provides answers to queries about our current situation, our
desired future course, and our current and ideal selves.
3. Time Horizon: It aims for long-term planning while considering the opportunities
presented by the current and foreseeable environmental conditions. It aids
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organisations in analysing their advantages and disadvantages and making

environmental adjustments. To make strategic planning useful, managers must
have a long-term perspective.
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4. Pervasive Process: It occurs in all organisations and at all levels, although top
executives are more heavily involved than middle or lower-level managers since
they have a greater sense of the future than others.
5. Task: is given to essential and high-priority tasks rather than ordinary and everyday
(c
tasks, which concentrates the organisation capabilities and resources. It transfers

funds from low priority to high priority areas.

6. Constant Process: Organisation can react to the dynamic, ever-changing

Notes
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environment through strategic planning, which is a continuous process.
7. Rigidity
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Many times, people believe that rigorous administrative action results from planning.
Many different internal rigidities could be caused by planning itself. The planning
stifles employee initiative and forces managers to carry out their duties in a rigid or
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straitjacket manner. In reality, rigidity could unnecessarily increase the difficulty of
managing tasks.
8. Assessment and control: The evaluation step in the strategic management process
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analyses the performance of the business, evaluates internal and external actions,
and, if necessary, implements corrective measures. Putting the organisation’s
strategy into practice, it ensures that the company has accomplished its goal.
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9. Inadequate alignment
Even with appropriate goal-setting, teams and individuals may have difficulties due to
a lack of alignment, which frequently results in prioritising problems and cooperation
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conflict, which can impede day-to-day efforts to accomplish the strategic goal. The
non-strategic labour that individuals are so accustomed to performing is the main
cause of strategic misalignment usually non-strategic. Often non-strategic objectives
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become the priority, as they are routine and often the most easily attained.
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10. Strategic direction refers to the plans that need to be implemented for an organisation
to progress towards its vision and fulfil its goals. It ensures owners and management
can communicate the importance of employees work and their contribution to
achieving business objectives.
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11. Setting strategic direction

Making an idea into a profitable firm is frequently the focus of an entrepreneur’s
early strategy. This entails developing a unique or distinctive product or service that
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fits a certain market.

In order to better meet the requirements and desires of clients, it is necessary to
innovate, test, and develop new products.
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12. Vision serves the purpose of stating what an organisation wishes to achieve in the
long run.
13. Mission relates an organisation to society.
14. Business explains the business of an organisation in terms of customer needs,
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customer groups and alternative technologies.

15. Objectives state what is to be achieved in a given time period.
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16. Envisioning This is the process of creating vision. It is a difficult and complex task
17. Corporate governance: Corporate governance refers to the set of guidelines,
customs, and procedures that regulate and control a business. Corporate governance
generally entails striking a balance between the needs of all of a company’s various
stakeholders, including shareholders, senior management, clients, suppliers,
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financiers, the government, and the local community.

18. Corporate social responsibility: Corporate social responsibility, or CSR, is a type

Notes
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of corporate self-regulation incorporated into a company model. It is also known
as corporate conscience, corporate citizenship, social performance, or sustainable
responsible business/Responsible Business. A firm monitors and guarantees that it
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is acting in accordance with the letter and spirit of the law, ethical standards, and
international norms through the use of a CSR policy, which serves as an integrated,
self-regulating system.
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19. Ethical decision-making: An approach to decision-making in business known as
ethical decision-making promotes moral norms over economic ones as a set of
guidelines. Businesses that emphasise ethical behaviour may take into account a
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number of ethical principles, such as how their choices affect the organisation, their
employees, and the larger community or globe.
Check Your Understanding
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1. ____________strategies and putting them into action to accomplish organisational
objectives is known as strategic planning.
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a. Organising
b. Staffing
c. Directing
d. Planning
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2. Data collection, inspection, and delivery to management for strategic goals are all
steps in the environmental analysis___________.
a. Sequence
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b. Process
c. Track
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d. Task
3. Choosing the appropriate course of action for the business to take in order to
achieve its goals is known as strategy___________.
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a. Evaluation
b. Formulation
c. Planning
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d. Organising
4. Strategic planning’s primary goal is to match a company’s mission and vision.
a. Objective
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b. Missionary
c. Goal
d. Motive
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5. A vision statement is much more than just an image of your company in the
Notes
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__________.
a. Present
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b. Past
c. Future
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d. Nil
6. _________________refers to the set of guidelines, customs, and procedures that
regulate and control a business.
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a. Corporate governance
b. Multi strategy
c. Business Strategy
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d. Turnaround
7. The term “governance” especially refers to the system of_____________, checks,
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policies, and resolutions established to direct company action.
a. Goals
b. Tactics
c. Regulations
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d. norms
8. The most direct ____________influencing corporate governance is the board of
directors.
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a. Employers
b. Stakeholder
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c. Consumers
d. customers
9. The _________should have complete confidence in the strategic plan and the
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direction of the business after extensive data collection, analysis, and collaboration
with management
a. Board
b. Staff
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c. Bod
d. Heads
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10. Corporate social responsibility, or CSR, is a type of corporate self-regulation

incorporated into a company _______.
a. Structure
b. Model
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c. Chart
d. process
11. An approach to decision-making in business known as ethical decision-making

Notes
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promotes moral norms over economic ones as a set of_______.
a. Protocol
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b. Rules
c. Guidelines
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d. action
12. Ethical frameworks are designed and implemented to ensure that the choices and
actions of an organisation or company reflect and uphold its_______
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a. Ethics
b. Plans
c. Programme
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d. action
13. Instead than focusing on a formalised system of moral laws, virtue ethics is more
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interested in the purposeful development of human _______.
a. Personality
b. Morality
c. Function
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d. Game
14. A moral framework for determining an ethical course of action based on outcomes
is provided by the consequentialist ________.
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a. Plan
b. Theory
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c. Decision
d. None of the above
15. The Jonsen or _____Box Approach is a popular model for making ethical decisions
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in medicine.
a. Four
b. Three
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c. Two
d. one
16. Business __________can determine the best courses of action while adhering to
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their basic values and beliefs by using ethical decision-making frameworks

a. Managers
b. Leaders
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c. Executives
d. directors

17. The________ step in determining the appropriate course of action is to analyse

Notes
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each event from an ethical perspective
a. First
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b. Secondary
c. Territory
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d. fourth
18. Instead than focusing on a formalised system of moral laws, virtue ethics is more
interested in the purposeful development of human _________.
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a. System
b. Morality
c. Forum
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d. decision
19. The term “corporate social responsibility” became popular in the ______s and
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has remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed
a. 1960
b. 1970 r
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c. 1980
d. 1990
20. In 1955, Peter Drucker wrote a book titled “The Practice of Management” that
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highlighted the significance of strategic decision-making.

a. 1960
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b. 1970
c. 1980
d. 1955
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Exercise
1. Is it necessary that the five steps in the strategic management process be performed
sequentially? Why or why not?
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2. What is the difference between vision and mission?

3. Does the CEO alone make the strategic decisions for an organization? Explain.
4. Is the mission statement comprehensive? Is it concise?
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5. Elaborate the principles of ethical decision making.

6. What are the challenges to strategic management and organisational adaptation?
Learning Activities
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1. Draw a table on theoretical perspectives on firm performance.

2. Draw a flow chart on the fundamentals of strategic management?

Check Your Understanding – Answers

Notes
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1. d 2. b
3. b 4. c
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5. c 6. a
7. c 8. b
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9. a 10. b
11. c 12. a
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13. b 14. b
15. a 16. c
17. a 18. b
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19. a 20. d
Further Readings and Bibliography
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1. Handy, C., The Empty Raincoat: Making Sense of the Future, Random House,
1995 (published in the United States by Harvard Business School Press as
The Age of Paradox).
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2. Semler, R., Maverick!, Arrow, 1994.
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3. Kaplan, R. and Norton, D., The Balanced Scorecard: Translating Strategy into
Action, Harvard Business School Press, 1996.
4. Marchand, D.A., Kettinger, W.J. and Rollins, J., Making the Invisible Visible,
John Wiley & Sons, 2001.
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5. The US Small Business Administration published these figures in 1995, the last
year for which reliable figures are available. Since then, the cost is estimated to
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have increased by a further 12%.

6. Drucker, P., “They’re Not Employees, They’re People”, Harvard Business
Review, February 2002.
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7. Stewart, T.A., Intellectual Capital, Doubleday, 1997. 8

8. Drucker, P., The Age of Discontinuity, Harper and Row, 1969.
9. For further information, see Edvinsson, L. and Malone, M., Intellectual Capital:
Realising Your Company’s True Value by Finding its Hidden Brainpower,
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HarperBusiness, 1997.
10. Peters, T. and Waterman, R., In Search of Excellence, Harper and Row, 1982.
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11. Naisbitt, J., Global Paradox: the bigger the global economy, the more powerful
its smallest players, Simon and Schuster, 1995.
12. “Special Report: Diasporas”, The Economist, January 4th 2003.
13. Globalisation statistics are provided by the Economist Intelligence Unit. For
further information, see www.eiu.com, and also the Economist Intelligence
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Unit’s World Competitiveness Yearbook.

14. This example and the broader issues it raises are expertly explored in Read,
Notes
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C., Ross, J., Dunleavy, J., Schulman, D. and Bramante. J., eCFO: sustaining
value in the corporation, John Wiley & Sons, 2001.
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15. Marchand, D.A. (ed.), Competing with Information: A manager’s guide to
creating business value with information content, John Wiley & Sons, 1999.
16. Marchand et al., Making the Invisible Visible.
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17. Drucker, P., Management Challenges for the Twenty-First Century, Butterworth-
Heinemann, 1999.
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18. Pearce, F., “Mamma Mia”, New Scientist, July 20th 2002.
19. Kellaway, L., “Boardroom Styles”, The World in 2003, The Economist, 2003.
20. Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy.
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Harvard Business Review. Available at: http://hbr.org/2008/01/the-five-
competitiveforces-that-shape-strategy/
21. Abrahams, Jeffrey. The Mission Statement Book: 301 Corporate Mission
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Statements from America’s Top Companies. Ten Speed Press, 2004.
22. Collins, Jim, and Jerry I. Porras. “Building Your Company’s Vision.” Harvard
Business Review, September/October 1996, pp. 65–77.
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23. Collins, Jim, and Jerry I. Porras. Built to Last: Successful Habits of Visionary
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Companies. HarperBusiness, 2004.
24. Jones, Patricia, and Larry Kahaner. Say It and Live It: The 50 Corporate
Mission Statements That Hit the Mark. Crown Business, 1995.
25. Kirkpatrick, Shelley A. Build a Better Vision Statement: Extending Research
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with Practical Advice. Lexington Books, 2016.

26. Kotter, John P. “Leading Change: Why Transformation Efforts Fail.” Harvard
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Business Review, March/April 1995, pp. 59–67.

27. Kotter, John P., and James L. Heskett. Corporate Culture and Performance.
1992. Reprint. Free Press, 2011.
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28. Nanus, Burt. Visionary Leadership. Jossey-Bass, 1995.

29. O’Hallaron, Richard, and David O’Hallaron. The Mission Primer: Four Steps to
an Effective Mission Statement. Mission Incorporated, 2000.
30. Raynor, Michael E. “That Vision Thing: Do We Need It?” Long Range Planning,
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June 1998, pp. 368–376.

31. Wall, Bob, Mark R. Sobol, and Robert S. Solum. The Mission-Driven
Organisation. Prima Publishing, 1999.
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32. Adeyemi, Awojobi and Orbih (2014).“ Strategic planning: a viable tool for
university library survival in a competitive environment”, Journal of Research
and Development, 1(11, 55-66. Adapted from www.mindtools.com/plreschn.
html
(c
33. Ahmad Reza Ommani (2011). “Strengths, weaknesses, opportunities and

threats (SWOT) analysis for farming system businesses management: Case of

wheat farmers of Shadervan District, Shoushtar Township, Iran” African Journal

Notes
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of Business Management, 5(22), 9448-9454.
34. Alexander, M. (1995).Planning for planners. Long Range Planning, 28: 101-
in
104.
35. Bernard Reimann(1988), “Getting Value from Strategic Planning,” Planning
Review, 16( 3), 42.
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36. Cheng, Y. C. (1999). Curriculum and pedagogy in new century: globalization,
localization and individualization for multiple intelligences. Keynote speech
presented at the 5th UNESCO-ACEID International Conference with the
O
theme “Reforming Learning, Curriculum and Pedagogy: Innovative Visions for
the New Century”, Thailand Cheng, Y.C. (2000). “A CMI-Triplization Paradigm
for reforming education in the new millennium”. International Journal of
Educational Management, 14(4), 156-174.
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37. Dale McConkey (1988), “Planning in a Changing Environment,” Business
Horizons: 66.
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38. Drucker, P. F. (1995). Managing in a time of great change. Oxford: Butterworth
Heinerman. Fred R (2011). Strategic management, Concepts and cases.
Pearson Education, Inc., publishing as Prentice Hall, New Jersey
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39. Gordon Greenley (1986), “Does Strategic Planning Improve Company
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Performance?” Long Range Planning,19( 2 ), 106.
40. Hitt, M.A., Ireland, R.D. and Hoskisson, R.E. (2012) Strategic Management
Cases: Competitiveness and Globalization, South-Western Pub, USA.
41. Institute of Rural Management (2008.), The State of Panchayats: 2007 – 2008
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An Independent Assessment Vol. I, Ministry of Panchayati Raj, New Delhi.

42. John Pearce II and Fred David(1987), “The Bottom Line on Corporate Mission
Statements,” Academy of Management Executive, 1(2 ), 109.
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43. Jon Swartz (2009), “MySpace Forges Ahead Despite Really Tough Times,”
USA Today, 3B.
44. Karen E. Hinton (2012), “ A Practical Guide to Strategic Planning in Higher
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Education”, Society for College and University Planning, ISBN 978-1-937724-

13-9. Lenz R.T. 1987), “Managing the Evolution of the Strategic Planning
Process,” Business Horizons 30(1), 39.
45. Lorange, P (1979). Formal Planninq Systems: Their Role in strategy
m
implementation. In D. E. Schendel & C. W. Hofer (Eds.) Strategic management;

A new view of business policy and planning , pp. 226-241, Boston: Little, Brown
& Co., 1979.
)A
46. Moravec, J. (2007) The Leapfrog Principle: A strategy for global leadership
in teacher education. Paper presented at the International Conference
on “Integration of Science and Liberal Arts and Construction of Teachers‟
Comprehensive Competence”, April 2007, Anqing, China.
(c
47. Mohammed Ahmed Hassanien (2017), “Strategic Planning in Higher

Education, a Need for Innovative Model, Journal of Education”, Society and
Behavioural Science, 23(2): 1-11, Article no.JESBS.37428.
48. PrahaladC.K. and Hamel Gary (1990).“The core competence of the

Notes
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corporation”, Harward Business Review, 68(3), 79-91.
49. Richardson Jr. (2006).“The library and information economy in Turkmenistan”,
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IFLA Journal. 32(2):131- 139.
50. Schwenk G. L. and K. Schrader, “Effects of Formal Strategic Planning in
Financial Performance in Small Firms: A Meta-Analysis,” Entrepreneurship and
nl
Practice
51. Sammut-Bonnici, T. and McGee, J. (2002).“Network strategies for the new
economy”, European Business Journal, 14, 174–185.
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52. Towards inclusive education (2010). Manual for special teachers, State council
of educational research and training, New Delhi.
53. Wisniewski, Mik Dan Olafson, Snjolfur (2004). “Developing balanced
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scorecards in local authorities: A comparison of experience”, International
Journal of Productivity and Management;53:7.
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ity
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Module - II: Environment Analysis and Diagnosis

Notes
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●● Concept of Environment Analysis in Business
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●● Impact of Environment on Strategic Planning
2.1 Concept of Environment Analysis
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Introduction
Environmental analysis is a method for locating all internal and external variables
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that could affect a company’s performance.
The study includes determining the potential threat or opportunity that each
component might present.
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●● These evaluations are later incorporated into the decision-making process.
●● The study helps align strategy with the organization’s environment.
●● r
Businesses must constantly evaluate the market and the environment around
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them since it has a significant impact on how they conduct business.
●● The environment analysis examines the evolving trends and how they affect
company.
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●● The strand
●● Tegist should be knowledgeable about resource capacities and efficient resource
utilisation.
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●● The strategist can use this to generate plans that can turn risks into advantages or
to create, develop, and deliver early warnings to stop dangers.
●● It clearly displays the company’s future plans and a forecast of what lies ahead.
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According to Clifton Garvin, environment analysis is, “Positive trends in the

environment breed complacency. That underscores a basic point: in change there is
both opportunity and challenge”.
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Notes
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Figure: Environmental Analysis

Source: http://www.systemico.ca/wp-content/uploads/2022/08/Environmental-
Analysis-1024x1024.png
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2.1.1 Concept of Environment Analysis in Business

By conducting an environmental analysis, organisations can identify internal and
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external elements that could have either a favourable or negative impact on their
business. By considering factors like the economy and technology, businesses can
anticipate potential possibilities and difficulties. By knowing how to do an environmental
analysis, may develop a profitable marketing strategy for the business. To conduct
an environmental analysis and choose the best course of action, a constant flow of
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essential data is required. Strategic planners use the information obtained from the
environmental research to anticipate future trends. The information can also be used to
set organisational goals and assess the operational environment.
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It ascertains whether the goals defined by the organization are achievable or not,
with the present strategies. If is not possible to reach those goals with the existing
strategies, then new strategies are devised or old ones are modified accordingly.
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Environment Analysis
Notes
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Environmental analysis is a strategic tool. It is a process to identify all the external and
internal elements. Which can affect the organisation’s performance analysis entails as-
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sessing the level of threat or opportunity the factor might present.
Figure: Concept of Environment Analysis
Source: https://image.slidesharecdn.com/
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environmentanalysisstrategicmanagement-201024043236/85/environment-
analysis-strategic-management-2-320.jpg?cb=1603514197
What is an Environmental Analysis?
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Can use a strategic tool called an environmental analysis or environmental
scanning to uncover all internal and external factors that might have an impact on an
organization’s performance. While external components highlight possibilities and
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challenges external to the organisation, internal components highlight the business’s
strengths and limitations.
An environment study takes into account trends and major variables, such as
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interest rates and how they may affect a company’s operations. These evaluations
can assist businesses in determining the market’s attractiveness and developing more
effective future strategies.
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What is the purpose of Environmental Analysis?
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Environmental evaluations assist companies in identifying prospective
effects that could present a chance or a hazard to them. They can better plan for
environmental changes as a result. Utilizing an environmental analysis has several
advantages, such as:
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◌◌ Forecasting the future;

◌◌ Recognizing dangers and enabling the development of response plans;
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◌◌ Improved organisational performance,

◌◌ Creation of successful company strategy and marketing plans and
◌◌ Assistance in achieving business goals.
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Steps Involved in Environmental Analysis

1. Identifying: In order to strengthen the position of the corporate entity in the market, it
is first necessary to identify the elements that affect it. At many levels, including the
firm level, market level, national level and global level, the identification is carried
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out.
2. Scanning: As all the elements discovered in the previous phase have the same
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degree of impact on the corporation, scanning indicates the process of critically

analysing the factors that significantly affect the business. Once the critical elements
have been determined, tactics can be developed to enhance it.
3. Analyzing: In this step, all environmental aspects are carefully analysed to ascertain
their impact on various business levels and the company as a whole. Benchmarking
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and the Delphi technique and scenario building are some of the various tools
accessible for the analysis.

4. Forecasting: The impact of the factors must be predicted after identification,

Notes
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inspection and analysis. Environmental analysis is a continuous process that uses
a holistic approach to cover the entire horizon rather than just a small portion of it. It
continuously scans the influences affecting the corporate environment.
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Figure : Process of Environment Analysis
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Source: https://edurev.gumlet.io/ApplicationImages/Temp/1929415_5e0c17ff-
091d-4b99-856aae2abd229c16_lg.PNG?w=400you
dpr=2.6
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Advantages of Environmental Analysis
When necessary, corrective action is taken using the internal insights from the
environmental study to evaluate staff performance, customer happiness, maintenance
costs, etc. Additionally, by matching the strategies with the organization’s goals, the
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external measurements assist in positively responding to the environment.
Environmental analysis aids in the early detection of dangers that enable the
organisation establish survival strategies. Additionally, it looks for opportunities to take
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a larger market share than its rivals, such as new product opportunities, segments and
technologies.
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Advantages Disadvantages
Forces organisations to look ahead Can be time consuming and expensive
Improved fit with the environment May be difficult in rapidly changing markets
better use of resources can become a straightjacket
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provides a direction/vision some unplanned for opportunities may be

missed
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Helps monitor progress can become bureaucratic

ensures goal congruence is less relevant in a crisis
Figure: Advantages and Disadvantages of Environmental Analysis

Source: https://kfknowledgebank.kaplan.co.uk/images/default-source/default-
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album/P3_CH1_img001.gif

2.1.2 Impact of Environment on Strategic Planning

Notes
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Managers of the firm must be able to foresee, recognise and deal with change
in the internal and external environment for it to grow and succeed. Since change
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is inevitable, company managers must actively participate in a process that spots
change and adjusts operations to effectively capitalise on it. Strategic planning is that
procedure.
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Examples of factors that are change agents that must be taken into account
throughout the strategic planning process are shown in the following diagram.
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Figure: Elaboration of Strategic Planning

Source: http://www.leoisaac.com/planning/images/business_environment.jpg
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Internal and External Environment

There are internal and external environments for every firm. The internal
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environment of a company or organisation is closely related to its human resources

and the way that employees carry out their duties in line with its objective. Planning
and management procedures can regulate and alter the internal environment to some
extent.
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On the other hand, the outside environment is uncontrollable. A company’s

managers have little control over its rivals in the market, changes to the law, or
overall economic conditions. A firm or organization’s management do, however, have
)A
some degree of control over how the business responds to changes in its external
environment.
Internal Environment Factors

Table 1 below identifies important aspects of the internal environment that
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can significantly impact on the well-being of a business or organisation. Generally

the strategic planning process will examine the strengths and weaknesses of the
organisation (see SWOT analysis) and it is likely that significant discussion will center
on the relative strength of internal environment factors.

Notes
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14 Different Internal Environmental Elements are Present:
◌◌ Policies and Plans
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◌◌ Indicator of Value
◌◌ Financial,
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◌◌ Marketing and
◌◌ Human resource resources
◌◌ Brand equity and corporate reputation
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◌◌ Plant/Machinery/Equipments (or can say Physical assets)
◌◌ Employment Management
◌◌ Interpersonal interactions with staff
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◌◌ Internal Resources and
◌◌ Dependencies for Technology
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◌◌ Codes of Conduct or, in some situations, organisational structure
◌◌ Infrastructure task execution and operation quality and scale
◌◌ Financial Prognosis
◌◌ r
The connection between the founders and their influence over decisions.
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Table 1: Factors in the internal environment and their affect on the business/
organisation
Factor Influence on the organisation

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Human The knowledge, experience and capability of an organisation’s workforce

Resource is a determining factor of success. For this reason, organisations pay
particular attention to the recruitment of staff and also to engage in the
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training of staff and volunteers to build the organisation’s capability. In

pursuing both recruitment and training strategies, an organisation is
often limited by its financial strength. Nevertheless, training of staff is
an essential aspect of good business management and even in difficult
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financial circumstances is an achievable strategy.

Organisational The culture within the organisation is a very important factor in business
Culture success. (see More about organisation culture). The attitudes of staff
and volunteers and their ability to “go the extra mile” makes a very
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significant difference. Negative attitudes can severely impact on the

organisation’s ability to implement strategies for development despite
however thorough the planning processes. Positive attitudes of staff
and volunteers will not only make the management task easier but
)A
also will be noticed and appreciated by customers of the business or

members of organisation.
Organisation Businesses and organisations may be impeded by their structure,
Structure constitution and/or forms of governance. Organisation structure is
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essentially the way that the work needed to carry out the mission
of the organisation is divided among its workforce. (see more about
organisation structure)

In a non-profit organisation, the organisation will include the management

Notes
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board or committee (i.e. President, Secretary, Treasurer and Ordinary
Committee Members), the salaried staff of the organisation and all
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the volunteers that have roles as coordinators of various business
functions (e.g. Event Coordinator, Promotions Coordinator and Coaching
Coordinator).When an organisation is a for-profit business that operates
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in a very competitive environment, its organisation structure may help
or hinder the ability of the organisation to react to change. For example,
when the organisation structure has many levels of management,
decision making can be slow as information is carried up and down
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the hierarchy. For this reason, “flatter” organisation structures are
often preferred i.e. people who work “at the coal face” and one level
of management above. Volunteers are normal part of the non-profit
organisation but not the profit-business. Although it is often hard to find
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volunteers, the organisation structure of the non-profit organisation can
be very flexible by appointing volunteers as needed.
Management The capability of the management team and the leadership styles
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employed by managers will also have a major impact on the morale
of staff (and volunteers in a non-profit organisation) and organisation
culture. More contemporary forms of management involve workers
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in decision making processes and trusting that, although managers
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and workers have different viewpoints, they largely benefit by working
together to achieve the business objectives.
Assets The internal environment of the organisation can be made richer or
poorer by its assets. For example, the organisation’s premises can be
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pleasant and uplifting, or demure and depressing. The availability of

equipment is another asset that can significantly impact on the internal
environment. If equipment is in short supply or not of the expected
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standard, then staff may be hindered in the performance of their duties,

or if equipment is used by customers then customer satisfaction will fall.
Financial Financial strength is a factor in its own right that influences the internal
Strength environment of the organisation. Despite however good other internal
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factors may be, it is very difficult for an organisation that is too short of
cash to implement strategies within the strategic plan. If the organisation
struggles financially this can impact on staff morale as budgets need
to be excessively tight.
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External Environment Factors
Important features of the external environment in which the firm operates are listed
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in Table 2 below. Although the company has little control over these factors, it is able to
adapt as necessary. The ability of business managers to react quickly to changes in the
external environment is their main challenge, and this depends on how quickly changes
are recognised. Daily media reports on certain external environmental aspects, such
as the state of the economy, provide managers with a wealth of data on which to base
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their strategic planning. However, some external causes could be challenging to spot,
especially if change is occurring at a very slow rate or is concealed from view.

Notes
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Figure: External Environment
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Source: http://www.leoisaac.com/planning/images/environ1.gif
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Table 2: Factors in the external environment and their affect on the business/
organisation
Factor Influence on the organisation

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Economic Prevailing economic conditions of the nation will have an effect on the
conditions spending patterns of citizens. Increases in interest rates and/or a high
level of unemployment will depress consumption of non-essential goods
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and services. For example when people experience financial hardship,

they will spend much less on sport and recreation, holidays, new cars
and luxury goods. Economic conditions are global as well as national,
and when there is a global financial crisis as in 2007, changes in the
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external environment can be dramatic.

Market The strength of business competition is a constantly changing factor in the
(competition) external business environment. Not only will competitors come and go,
but they will also change marketing strategies, product lines and prices.
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Often such changes are not heralded and business managers must be
alert as to what competitors are doing.
Climate Climate change is an insidious threat because the pace of change may be
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change recognisable only if considered on a decade-by-decade basis. The effect

of climate change will not fall equally on all nations and all businesses.
Businesses that depend directly on a good supply of water e.g. agriculture,
field sports will be adversely effected if climate change results in reduced
rainfall. However the flow on affects of drought will eventually work their
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way through to all businesses in the effected community.

Legal Taxation is one of most obvious changes in law through legislation.

Notes
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Sometimes taxation changes occur overnight with little warning and
sometimes there is plenty of time for the business to prepare. Other law
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changes that commonly affect business include Workplace Health and
Safety, Industrial Relations, Consumer Protection and Environmental Law,
Media The media is undergoing rapid and significant change. The main driver of
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this change is technology and the rise of the internet. Newspapers once
carried many pages of job adverts but now this business is conducted
by online recruitment companies such as Seek.
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Political Like law, changes in government policy can be well notified and discussed,
or without warning. As an example of how government policy has an effect,
is that many organisations depend on government financial assistance.
When there is a change of government, such funding assistance can
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disappear in a short space of time.
Demographic There is constant change in the make-up of the population. Some of
these changes include an increasing proportion of elderly citizens,
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increasing number of two-income families, the age at which people
marry is increasing, increasing ethnic diversity and suburbs which were
once dominated by young families now have few. These demographic
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changes can have a significant effect locally. For example, a sport club
which once prospered can begin to decline as the local area has less
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and less children.
2.2 External Environment Scanning

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External elements are the components that are independent of the commercial
association. Even though these elements are external to the association, they have
an impact on management’s operations. Both macro environmental and micro
environmental elements can be classified as external influences. Legal, political, social,
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cultural, demographic and technological aspects of the macro environmental are

included. Suppliers, organisations, consumers, marketplaces and rivals are examples of
micro environmental influences.
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Environmental scanning is a procedure that methodically examines and analyses

pertinent data to find external opportunities and risks that may have an impact on
decisions in the future. It should be utilised as a step in the strategic planning process
and is closely tied to a SWOT analysis. External scanning elements that might be taken
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into consideration include:
●● Trends: What market or industry trends are present that can have a favourable or
negative impact on the organisation?
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●● Competitors: What are they doing that gives them an advantage over this?
Where can we take advantage of the flaws of their rivals? What technological
advancements might have an impact on their organisation in the future? Exist any
modern technology that could increase the effectiveness of their company?
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●● Customers: How has the clientele changed over time? What is hindering the
capacity to offer excellent customer service?

●● Economy: What developments in the economy might have an impact on

Notes
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forthcoming business?
●● Labor supply: How would they describe the labour market in the regions in which
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they operate? How can guarantee quick access to workers in high demand?
●● Political and legislative sphere: How will the results of the elections affect the
company? Exists legislation that will have an impact on the business soon?
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To make the environmental scan a viable tool, each organisation must determine
which external influences have the greatest impact.
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Scanning The external environment
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Figure: Scanning of External Environment

Source: https://slideplayer.com/slide/13213213/79/images/3/SCANNING+THE+EXT
ERNAL+ENVIRONMENT.jpg
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2.2.1 Understanding External Environment Scanning

The external business environment comprises of more general forces that have
an impact on other players in the micro-environment in addition to the start-up. These
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determine the features of the opportunities and threats and are elements that any
other organisation have little to no control over. The environment can have a significant
impact on the startup. The best business plan with the best technology may still fail
)A
tragically if other circumstances such as new laws, altered government policies, or an

economic crisis in the host nation occur. As a result, it is crucial that they keep a careful
eye on environmental elements that have an impact on the start-up and make the
necessary preparations to deal with new obstacles.
Contrary to internal factors, external factors have an impact on variables outside

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of the company’s control. Businessmen can make appropriate adjustments to their

marketing strategy to make it more receptive to the external environment by taking

into account the external environment. If they advertise the products on Amazon,
Notes
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this may sometimes entail creating a new product photography approach, locating
dependable partners willing to invest, or modifying the initial business plan. There are
many characteristics that are regarded as external factors. Some of the most notable
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and significant ones among them need to be listed, including the laws, the physical
environment, and customer needs.
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Micro factor types
◌◌ Customers,
◌◌ suppliers,
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◌◌ rivals,
◌◌ public marketing,
◌◌ and the media
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Macro-talent factors
◌◌ Economic
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◌◌ Political
◌◌ legal
◌◌ Social,
◌◌ technological, r
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◌◌ and natural
A framework called PESTEL analysis enables us to assess the start-state up’s
in reference to the external environment. It covers environmental, legal, political,
economic, social and technological aspects. It may also be referred to as STEP,
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STEEP, PESTEL, PESTLE, or LEPEST, depending on the items that are included and
the arrangement in which they are listed.
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Figure: Macro Environment Forces

Source: https://www.mbaskool.com/2013_images/stories/dec_images/graph.jpg
Political Factors
Notes
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Political factors, broadly speaking, are those that are influenced by governmental
acts and policies. They include, but are not limited to, things like corporate taxation,
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other fiscal policy initiatives, trade disputes, antitrust and other anti-competitive
challenges and free trade difficulties.
It is important to note that management teams may face significant risks and
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opportunities even from the shadow of future trade disputes or antitrust problems. The
management team of a company may find it particularly difficult during the run-up to
elections due to the opposing parties’ differing positions on important platform issues.
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This is because the range of potential outcomes depends greatly on election results.
Political Factor Example: A multinational company closes several facilities in a

higher tax jurisdiction in order to relocate operations somewhere with lower tax rates
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and/or greater state funding and grant opportunities.
Economic Factors
Economic factors relate to the broader economy and tend to be expressly financial
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in nature. They include:
◌◌ Interest rates
◌◌ Employment rates r
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◌◌ Inflation
◌◌ Exchange rates
Many analysts in the financial services sector tend to overweight economic factors
in their analysis since they’re more easily quantified and modeled than some of the
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other factors in this framework (which are somewhat qualitative in nature).
Economic Factor Example: Based on where we are in the economic cycle and
what Treasury yields are doing, an equity research analyst may adjust the discount
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rate in their model assumptions; it can have a material impact on the valuations of the
companies they cover.
Social Factors
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Social factors tend to be more difficult to quantify than economic ones. They refer
to shifts or evolutions in the ways that stakeholders approach life and leisure, which in
turn can impact commercial activity. Examples of social factors include:
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◌◌ Demographic considerations
◌◌ Lifestyle trends
◌◌ Consumer beliefs
)A
◌◌ Attitudes around working conditions

Social factors may seem like a small consideration, relative to more tangible
things like interest rates or corporate taxation. Still, they can have a shockingly
outsized impact on entire industries as we know them. Consider how trends towards
(c
healthier and more active lifestyles have ushered in the evolution of connected fitness
technologies, as well as many changes to the nature of food products we consume and
how these food products are packaged and marketed.

Social Factor Example: Post-pandemic, management at a technology firm has had

Notes
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to seriously reevaluate hiring, onboarding and training practices after an overwhelming
number of employees indicated a preference for a hybrid, work-from-home (WFH)
model.
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Technological Factors
In today’s business landscape, technology is everywhere – and it’s changing
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rapidly. Management teams and analysts alike must understand how technological
factors may impact an organization or an industry. They include, but are not limited to:
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◌◌ Automation
◌◌ How research and development (RandD) may impact both costs and
competitive advantage
◌◌ Technology infrastructure (like 5G, IoT, etc.)
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◌◌ Cyber security
The speed and scale of technological disruption in the present business
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environment are unprecedented, and it has had a devastating impact on many
traditional businesses and sectors – think Uber upending the transportation industry or
the advent of e-commerce revolutionizing retail trade as we know it.
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Technological Factor Example: A management team must weigh the practical and
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the financial implications of transitioning from on-site physical servers to a cloud-based
data storage solution.
Environmental Factors
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Environmental factors emerged as a sensible addition to the original PEST

framework as the business community began to recognize that changes to our physical
environment can present material risks and opportunities for organisations. Examples of
environmental considerations are:
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◌◌ Carbon footprint
◌◌ Climate change impacts, including physical and transition risks
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◌◌ Increased incidences of extreme weather events

◌◌ Stewardship of natural resources (like fresh water)
Environmental factors in a PESTEL analysis will overlap considerably with those
typically identified in an ESG (Environmental, Social and Governance) analysis. In fact,
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it’s widely believed that the addition of environmental factors to the PESTEL framework
evolved from the growing popularity of movements such as CSR (Corporate Social
Responsibility) and ESG.
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Environmental Factor Example: Management at a publicly traded firm must

reevaluate internal record keeping and reporting tools in order to track greenhouse gas
emissions after the stock exchange announced mandatory climate and ESG disclosure
for all listed companies.
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Legal Factors
Legal factors are those that emerge from changes to the regulatory environment,

which may affect the broader economy, certain industries, or even individual businesses
Notes
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within a specific sector. They include, but are not limited to:
◌◌ Industry regulation
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◌◌ Licenses and permits required to operate
◌◌ Employment and consumer protection laws
◌◌ Protection of IP (Intellectual Property)
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Regulation can serve as a headwind or a tailwind for operators. An example
headwind might be increased capital requirements for financial institutions; an example
tailwind is if regulation is so heavy in a particular industry (let’s say food production)
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that it may serve as a protective moat for established operators, creating an additional
barrier preventing potential new entrants.
Example Legal Factors: A rating agency is assessing the creditworthiness of a
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technology firm that has considerable growth prospects in emerging markets. The
analyst must weigh this growth trajectory against the inherent risk of IP theft in some
jurisdictions where legal infrastructure is weak. IP theft can severely undermine a firm’s
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competitive advantage.
Features of External Environmental Analysis
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Following Characteristics of external environment analysis may be observed by
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studying and analyzing its meaning.
1. A Constant Process
Analysis of the external environment is a continual activity because, if an entrepreneur
does not continuously monitor environmental changes, he will not be able to identify
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dangers and problems.

2. Identification of Possibilities and Obstacles
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In order to meet the challenges of some factors and their tendencies, the
entrepreneur analyses the external environment to assess all parties and factors to
identify possibilities and problems for his business.
3. Modification of Strategies and Goals
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The entrepreneur assesses these elements in the external environmental analysis

to identify opportunities, threats, reactions, and problems for his business. He then
modifies his strategy and goals in light of those variables.
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4. Process of Inner Knowledge

Through the process of conducting an external environmental analysis, it is possible
to learn not only about the current state of the environment but also about potential
)A
future developments and untapped prospects. As a result, the entrepreneur’s

decision-making and strategy and objective revisions are simplified.
The opportunity and threat analyses that are part of external environmental
analysis give entrepreneurs the chance to take advantage of the current favourable
circumstances, which allow for swift decision-making and implementation of plans
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to generate profits.

External environmental analysis is the opportunity and threat analysis, ‘meaning

Notes
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thereby that the external environmental analysis provides the opportunity to the
entrepreneur that presently the circumstances are favorable and hence decision
may be taken quickly and may be implemented also, so that profit may be earned.
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the contrary, the external environmental analysis may also pose the threat that
the circumstances are not favorable and hence caution and care be exercised,
otherwise, losses may occur.
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6. Goal Orientations, sixth
The entrepreneur searches for business opportunities with the aid of external
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environmental analysis in an effort to either attain his aim or to learn about future
possibilities and their actual impacts.
Need and Importance of External Environmental Analysis
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For an entrepreneur, continuous study and evaluation of external environmental
analysis are essential.
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External Environmental Analysis
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For the entrepreneur analysis of external environment is necessary, so that he may

know.
1. Which environmental issues are endangering the entrepreneur’s current approach

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and attainable goals?

2. Which environmental factors are offering opportunities that the current strategy
could take advantage of by making the necessary adjustments?
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Importance and necessity of external environmental analysis may be easily

understood with the help of following points.
1. Entrepreneurship’s success
Advance assessment of the extensive positive and negative effects of the external
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environment and its elements is required for an enterprise’s success.

2. Development of Workable Plans
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The corporate environment is dynamic, not static, according to our research.

Therefore, the business owner should thoroughly evaluate and analyse it to give his
plans a usable and practical form.
For the success of an enterprise, advance evaluation of the far-reaching favorable
effects and ill effects of such advance evaluation provides some specific knowledge,
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the entrepreneur gets alert about them aFormulation of Viable Plans

3. To Create Measures for Competitive Environment

Notes
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The competitive environment is a crucial component of the whole environment
and must be taken into consideration. Therefore, it is crucial for the entrepreneur
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to research and evaluate the external environmental aspects in order to develop
countermeasures to their competitors’ methods. Thus, in order to develop effective
countermeasures against the competition, external environmental study is required.
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4. Creation of Effective Plans
Objectives and goals, policies, a budget, a schedule, standards and strategies are
all part of planning. The foundation of planning is the forecast. The identification of
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diverse components, bases and consequences is thus required for the formulation
of successful business strategies by entrepreneurs.
5. Helpful in Selection of the Best Alternative
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By taking into account future opportunities, challenges, and dangers, external
environmental analysis and study not only assist the strategic decision makers in
limiting the number of accessible alternatives but also in deleting the alternatives
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that are irrelevant. The optimum strategy cannot be quickly determined, but
undesirable options can be greatly reduced and the best option can be chosen
through environmental study and research conducted by outside sources.
6. Use of Profit Opportunities in Business r
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Information about different corporate profit-making opportunities is provided through
the analysis of the external environment. The entrepreneur must be aware of this
environment and its factors in order to succeed. Similar to this, the entrepreneur
should be knowledgeable about current economic affairs, social trends,
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governmental regulations, international corporations, etc. so that they may take

advantage of any possibilities that arise to maximise their earnings. He may become
more aware of potential problems and hazards as a result of this knowledge. As a
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result, the entrepreneur might employ external environmental analysis to identify

many prospects for profit in his company.
7. To Provide Permanency to Possibilities for Sale of Products
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The rivals’ products, production processes, cost structures, marketing plans, supply
chains, and technical and sales approaches are also researched in relation to the
external environment and its contributing aspects. Because doing so enables the
business owner to make strategic decisions more readily, doing so increases the
likelihood that things will sell permanently.
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8. Market leadership
External environmental analysis is also necessary since it allows the business
)A
owner to learn about the latest trends, consumer preferences, new methods and
manufacturing processes, as well as new goods and services that are available
on the market. By effectively leading the market with the use of such expertise, the
entrepreneur may improve sales, which will undoubtedly lead to high profits for him.
9. Vigilance towards Future Threats and Challenges
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The analysis of the external environment also gives the business owner advanced
information about a variety of impending hazards and difficulties and alerts him

to them. The entrepreneur’s planning department and high management are

Notes
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always monitoring market developments to identify potential dangers and business
possibilities for him.
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10. The Institution and Entrepreneur’s Permanent Residence
Any entrepreneur must do an external environment analysis to guarantee the long-
term viability of his institution. Why? Because doing so allows him to continuously
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monitor the external environment and its elements and make the required
adjustments to his strategies and goals. If he doesn’t, either his institution or himself
will eventually cease to exist.
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2.2.2 Remote Environment
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Figure: Remote Environment
Source: https://qsstudy.com/wp-content/uploads/2018/09/Remote-Environment.
jpg
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Remote Environment:
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The remote environment consists of a set of forces that originate beyond a firm’s
operating situation. These comprise political, economic, social, technological, and legal
forces which create opportunities, threats, and constraints for the firm. The operating
environment, which has a direct impact on the operations of a firm, includes all factors
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which a firm faces while sourcing its inputs and while marketing and selling its outputs.
The competitors, customers, suppliers, and the labor market constitute the operating
(competitive) environment. The remote environment has a variety of factors that
compromise; any type of firm’s operating situation. “The remote environment comprises
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factors originating beyond, and usually irrespective of, any single firm’s operating
situation economic, social, political, technological, and ecological factors”. These
environments are also popularly known as external environments.
)A
There are many strategic analysis tools that a firm can use, but some are more
common. The most used detailed analysis of the environment is the PESTLE analysis.
This is a bird’s eye view of the business conduct. Managers and strategy builders
use this analysis to find where their market currently. It also helps foresee where the
organization will be in the future.
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PESTLE analysis consists of various factors that affect the business environment.
Each letter in the acronym signifies a set of factors. These factors can affect every

industry directly or indirectly. For example, when the economy slows and construction
Notes
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starts to decrease, an individual contractor is likely to suffer a decline in business, but
that contractor’s efforts in stimulating local construction activities would be unable to
reverse the overall decrease in construction starts.
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For example, when the economy slows and construction starts to decrease,
an individual contractor is likely to suffer a decline in business, but that contractor’s
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efforts in stimulating local construction activities would be unable to reverse the overall
decrease in construction starts.
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Figure: The Firms External Environment

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Source: https://slideplayer.com/8044249/25/images/slide_1.jpg
2.2.3 Industry Analysis through Porter’s Approach

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What is Porter’s Approach to Industry Analysis?
Every person in business usually does a lot of research and makes a lot of plans
before starting a business. One of the most important among such aspects is to
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conduct an industry analysis. It can provide the entrepreneur with an idea regarding the
growth of his products or services and the amount of competition he has to face from
others.
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Michael Porter’s Five Forces is one such tool which can be used to evaluate the
five important factors regarding the growth of the industry. It helps the entrepreneur to
get to know about the environment surrounding the industry and the necessary steps to
be taken to get success in this market.
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Figure: Porters Five Forces
Source: https://s3-us-west-2.amazonaws.com/courses-images/wp-content/
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uploads/sites/1972/2017/07/05164839/Porters5Forces2.png
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Porter’s Five Forces Analysis
It is important to have firm knowledge regarding the industry before making the
investments and Porter’s 5 Forces is the most effective tool for this purpose. The
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five forces model plays an important role to identify and analyse the primary five
competitions in any industry and also provides a clear picture regarding the strengths
and the weaknesses of the industry.
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This can prove to be a huge difference for someone new in this sector and can
help him find his feet. He can use these factors to his advantage so that he can
maximise his profit.
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Porter’s Five Forces Model Consists of the Following Sections:

1. Power of Supplier
The ability to raise or lower the price of particular commodities is one that suppliers
have. It is dependent on a wide range of variables, including the number of suppliers
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on the market, the products’ quality and whether or not they are superior to those
of other providers, etc. The influence of the suppliers tends to increase if there are
fewer suppliers in that particular area. Then, the business owner must consider
)A
the concept of alternate suppliers, albeit this may be challenging owing to financial
limitations.
2. Power of Buyer
Customers enjoy haggling and are more successful at lowering market pricing when
(c
they do so. It also depends on a wide range of variables, including the quantity of
customers, the size of the order, the demand for new products among customers,

the cost of competing goods and the caliber of the products. They have more control
Notes
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over the prices if there are fewer purchasers.
3. Competition with Others
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It ranks among the most crucial elements in the Porter analysis. The quantity of
rivals in an industry market, as well as their potential, is quite important. When
there is a lot of competition for a freshly released product, there may be a problem
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because customers will have several options. However, if there are fewer options
available on the market, this is not the case. In order to gain the upper hand in a
cutthroat market, a company chooses many strategies to boost their profit:
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◌◌ Adapting pricing to market conditions;
◌◌ enhancing product quality to draw in more customers;
◌◌ creatively utilising distribution methods to capture a new market;
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◌◌ and effectively utilising client relationships by satisfying their demands
4. Threat of Getting Substituted
Customers frequently discover alternate ways to satisfy their needs, which eliminates
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the need for them to purchase these goods or services. This could end up being a
serious danger to the business. Less demand exists for the products when there
are more alternatives on the market. In some circumstances, the prospect of being
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replaced can have an effect on both the cost of the items and the sustainability of
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those products.
5. Threat Due to New Entry
In addition to the threat posed by direct competitors, there is also the risk posed by
new businesses entering the market and sparking a significant uproar. This could
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hurt product sales and diminish their position in the industry. Free entry markets
typically suffer more under these circumstances, necessitating a few entrance
barriers to lessen rivalry from new businesses.
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Countering the Five Forces

On three different levels, a plan can be developed to combat Porter’s 5 forces
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paradigm.
◌◌ Corporate,
◌◌ business-unit, and
◌◌ departmental levels
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Industry competition is immediately contextualised at the business unit level.

Porter proposed three general strategies: cost leadership, distinctiveness and a focus
on outperforming competitors. Firms can benefit from a position where they can
)A
effectively leverage their strengths and counteract the effects of five competing forces
by using a good generic strategy.
2.3 Internal Environment Scanning

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Internal analysis is a prime example of environmental scanning in strategic

management. They are internal to the organisation and have an impact on how well
the business performs overall. This entails comprehending and interpreting various
resources, such as human resources (employee relations with management and other
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employees, management’s relationships with shareholders, and brand awareness),
capital and technological, cultural, organisational and other resources. The internal
examination reveals the company’s vulnerabilities and strengths as a result.
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While the external environment presents opportunities and risks, the internal
environment gives businesses advantages and disadvantages. SWOT Analysis’s four
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impacting environmental elements are as follows:
1. Strength – an inherent capacity of an organization which helps it gain a strategic

advantage over its competitors.
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2. Weakness – an inherent constraint or limitation which creates a strategic
disadvantage for a business.
3. Opportunity – a favorable condition in the organization’s environment enabling it to
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strengthen its position.
4. Threat – an unfavorable condition in the organization’s environment causing damage
to the organization.
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Figure: Company’s Internal Environment

Source: https://slidetodoc.com/presentation_image_h2/58a4881a41732df699ff852
fc4308a77/image-35.jpg
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2.3.1 Understanding Internal Environment Scanning

Internal scanning entails examining the farm business from within to determine its
strengths and shortcomings as well as to evaluate its resources and management’s
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capabilities. It is a step in the process of strategic planning. Internal scanning’s role

in the planning process is described in an overview of Strategic Planning for Farm
Businesses.
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Three categories can be found in internal business scanning:
1. What are the specific advantages and disadvantages of farm business?

2. Individual Person - What are the special abilities and limits of each manager
of the company?
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3. Individual Businesses: How will they all compete in the market? What are the
crucial elements that decide whether an enterprise succeeds or fails?

Internal Environment Analysis

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Figure: Internal Environment Analysis
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Internal Environment Analysis
Typically, internal analysis is a component of SWOT analysis, which also
examines an organization’s strengths and weaknesses. Internal analysis is the
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systematic examination of every aspect of an organization’s internal environment in
order for management to determine the variables’ strengths and weaknesses and take
appropriate action. The process of locating the resources and barriers that characterise
the potential and constraints of the business
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Importance of Internal Analysis and its Benefits
When developing plans for competitive advantages, managers conduct internal
analysis to pinpoint strengths to build on and weaknesses to overcome. However, the
following are the goals or advantages of internal analysis:
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◌◌ To hold the strengths;

◌◌ To identify the weakness;
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◌◌ To take the opportunities from an external environment;

◌◌ To adjust to the external environment;
◌◌ To determine the profitability index;
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◌◌ Strategy formulation;
◌◌ To co-ordinate the managerial functions;
◌◌ To take competitive advantages.
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Areas Covered by an Internal Analysis

An organization’s strengths and weaknesses are evaluated by conducting an
internal environmental study of key internal components. The following sections
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describe the topics that organisations should examine when conducting an internal
environmental analysis:
◌◌ Financial standing,
◌◌ product or service positioning,
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◌◌ product or service quality,

◌◌ marketing prowess,
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◌◌ research and development prowess,
◌◌ organisational structure,
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◌◌ human resources,
◌◌ facility and equipment condition,
◌◌ Past and present goals and strategies.
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Making a Business Inventory
The first step in internal scanning involves describing business. This will help us
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assess the value of the various aspects of business. Below are four broad categories
that can be used to describe business.
●● Physical Resources – Physical resources make up the farm industry. Most farmers
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can quickly identify these as they include things like land, equipment, buildings
and other assets.
●● People Resources - There are also human resources in the farming industry.
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These are more challenging to spot. Although it is simple to identify the individuals
participating in the business, it is more challenging to specify the contribution that
each one makes to the farm business. These cover subjects like identifying the
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participants’ management capabilities and outlining the decision-making process.
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●● Additional Resources - It’s important to identify additional resources for the
agricultural business, such as financial resources. For instance, the business
financial statements can easily detect these in the business records. Individuals
might want to consider asking themselves if there is sufficient working capital
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before identifying financial resources. Is it possible to borrow money if necessary?

Exist external equity sources?
●● Other Factors - A wide range of additional factors, such as considering past
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achievements, characterising organisational culture, examining the data collection

method and identifying any other pertinent factors.
2.3.2 Resource Based Approach

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RBV is a strategy for gaining a persistent competitive advantage. Following writings

by Birger Wernerfelt, Prahalad and Hamel, Barney, J., and others, the thought behind
this method began to take shape in the 1980s and 1990s. Supporters of this viewpoint
contend that rather than focusing on the external competitive environment, businesses
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should look inward to identify sources of competitive advantage.
RBV supporters contend that by repurposing current resources, it is simpler and

more practical to take advantage of outside opportunities. This method contrasts with
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learning new skills or building new capabilities for every new chance. The RBV model
states that resources are crucial in helping companies function better. The two types of
resources are:
◌◌ Tangible, and
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◌◌ Intangible

Tangible Assets
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Physical objects make up tangible assets. All of these assets are material,
including land, structures, machinery, equipment and capital. Physical resources are
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readily available for purchase by organisations on the market. As a result, they offer
little long-term benefit to the companies. This is due to the fact that competitors can
also purchase the same assets, resulting in competitive parity.
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Intangible Assets
Intangible assets are things that don’t exist physically. However, a business may
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own these resources. Trademarks, intellectual property and brand reputation are a few
examples of intangible assets. In contrast to tangible assets, building intangible assets
takes a lot of time for businesses. As a result, it is difficult for a company’s rivals to
purchase these assets on the open market. Intangible assets are typically found
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within a corporation. As a result, intangible assets are crucial to a company’s ability to
compete. Frequently, a company’s primary source of long-term competitive advantage
comes from intangible assets.
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Significance of Resource-Based View
The objective of the resource-based vision approach is to acquire a long-lasting
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competitive advantage. Only by thorough resource analysis, allocation and cross-
functional resource use can a company maintain its competitive advantage. Similarly,
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a business can only develop more effectively and differentiate itself from competitors if
it fully realises the potential of its staff. An RBV approach aids businesses in achieving:
◌◌ Visibility for effective resource allocation

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◌◌ Maintaining competitive advantage

◌◌ Cross-functional resource utilisation
Having Visibility To Allocate Resources Effectively

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Managers can learn more about resource skills and competences thanks to the
comprehensive perspective of all resource pools. Managers are thus able to allocate
resources in accordance with the range and market demand of the company’s products
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and services. They can make data-driven decisions, fully use people and increase
revenue with the aid of real-time information.
Keeps the Advantage Over Rivals

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The increase in market turbulence fuels large-scale, ad hoc customer demands.

The ability of a corporation to adapt to shifting market conditions frequently becomes
the determining element for its development and success. In these circumstances,
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managers can implement crucial strategic responses by utilising both their tangible and
intangible assets. Demand fulfilment is made possible by an RBV of strategy, which
helps a business maintain its competitive edge.
Interdepartmental Resource Use

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The resource-based strategy paradigm enables enterprise-wide visibility of

the workforce and its knowledge in a matrix organisation. It aids in forming a cross-
functional team and allocating the proper resources from several departments to carry
out the project. It lowers the costs associated with the employment process and aids
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in utilising a diverse workforce. Additionally, staff members are assigned multifaceted
projects to work on in order to build their professional portfolios.
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As an illustration, Honda, which adopted the RBV strategy, based its business
strategy on the firm’s strength, capability and expertise in producing gasoline-powered
engines. Ultimately, the company used these resources to produce world-class
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gasoline-powered engines, growing to become the largest engine producer in the world.
For a company to develop resource-based advantages, its resources must be valuable.
Organisations must use their resources effectively if they want to outperform their rivals.
A company’s success or failure in the market depends on the unique viewpoint provided
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by a “inside-out” view of the corporation from RBV. The valuable resource must give a
company the ability to operate and conduct in ways that increase the firm’s financial
value through high sales, low expenses, high margins,and other outcomes. Successful
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innovation by a company is an element of unique capability that is enduring and
appropriate.
Consider an innovative product like Apple’s iPod and iTunes. The company’s top-
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notch innovation in product design and usefulness is proving difficult for competitors
to emulate. Despite maintaining the top spot in digital media with its iPod and iTunes
online stores, Apple does not rest on its laurels. When Apple launched the iPhone in
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2007 and entered the mobile phone market, competitors Sony and Samsung were
left in the dark about what products Apple would release in the future. This constant
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innovation and product creation gives Apple an edge over its competitors because they
find it difficult to match their success. In order to get a competitive advantage, strategic
resources also consider non-financial aspects like knowledge-based human resource
management operations for their customer service department.
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Figure: A resource based approach to strategy analysis

Source: https://www.researchgate.net/profile/Irena-Figurska/
publication/280113700/figure/fig1/AS:669444049231874@1536619307199/A-
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resource-based-approach-to-strategy-analysis-Source-based-on-Grant-R-M-The.
png

2.3.3 Value Chain Analysis

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With each transaction, a successful firm adds value for both its consumers
and shareholders in the form of customer satisfaction and profit, respectively.
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Businesses that produce more value with each sale are in a better position to make
money than those that do not. Understanding Company’s value chain is essential
to determining how much value it is producing. See what a value chain is, why it’s
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crucial to comprehend it, and the steps can take to conduct one to assist in business
generate and hold onto more value from its sales in the sections below understanding
the value chain The term value chain refers to the various business activities and
processes involved in creating a product or performing a service. A value chain can
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consist of multiple stages of a product or service’s lifecycle, including research and
development, sales and everything in between. Taking stock of the processes that
comprise company’s value chain can help gain insight into what goes into each of its
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transactions. By maximizing the value created at each point in the chain, company can
be better positioned to share more value with customers while capturing a greater share
for itself. Similarly, knowing how firm creates value can enable to develop a greater
understanding of its competitive advantage.
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Components of a Value Chain
According to Porter’s definition, all of the activities that make up a firm’s value
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chain can be split into two categories that contribute to its margin: primary activities and
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support activities.
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Figure: Components of Value Chain

Source: https://online.hbs.edu/online/PublishingImages/blog/posts/value_chain_
blog_post_logo.jpg

Primary activities are those that go directly into the creation of a product or the
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execution of a service, including:
◌◌ Inbound logistics: Tasks involving the receipt, storage and inventory control of
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raw materials and parts
◌◌ Operations: Tasks involved in transforming components and raw materials into
a finished good.
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◌◌ Distribution-related activities, such as packaging, sorting and shipping;
outbound logistics
◌◌ Marketing and sales: Activities involved in promoting and selling a good or
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service, such as price strategy, advertising and promotion.
◌◌ After-sales services: Tasks that are carried out after a transaction has been
completed, such as setup, instruction, quality control, maintenance and
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customer support.
Secondary activities help primary activities become more efficient—effectively
creating a competitive advantage—and are broken down into:
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◌◌ Procurement: activities involved in obtaining supplies of raw materials, parts,
machinery and services.
◌◌ Technological development: activities including research and development,
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such as process development, market analysis, and product design
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◌◌ Infrastructure: activities linked to the business’s overhead and management,
including funding and planning.
◌◌ Human resources management: activities related to the hiring, training,
development, retention, and remuneration of personnel. What is value chain
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analysis?
Value chain analysis is a means of evaluating each of the activities in a company’s
value chain to understand where opportunities for improvement lie. They are prompted
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to think about how each phase adds or subtracts value from ultimate product or
service when they conduct a value chain analysis. In turn, this can assist in realising a
competitive advantage, such as:
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◌◌ Cost-cutting by increasing the effectiveness of each value-chain operation and

lowering the associated costs
◌◌ Product differentiation, which involves devoting additional time and money to
things like design, marketing, and research and development that can make
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product stand out.

Usually, improving one of the four secondary activities’ performance will help at
least one of the primary activities. How to conduct a value chain analysis
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1. Identify Value Chain Activities

The first step in conducting a value chain analysis is to understand all of the primary
and secondary activities that go into product or service’s creation. If company sells
multiple products or services, it’s important to perform this process for each one.
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2. Determine the Cost and Value of Activities

Finding the value that each activity brings to the process and its associated expenses

comes next once the primary and secondary activities have been identified. When
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considering the value produced by an activity, consider how each one improves the
happiness or enjoyment of the end user. How does it add value to my company? For
instance, does using a particular material make a product more luxury or durable for
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the user? Does adding a specific feature improve the likelihood that business will
experience network effects and grow?
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In a similar vein, it’s crucial to comprehend the charges related to each stage of
the procedure. Depending on certain circumstance, they might discover that cutting
costs is a simple method to get better value each transaction provides.
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3. Identify Opportunities for Competitive Advantage
Initially can assess value chain using the perspective of whatever competitive
advantages are attempting to acquire once being assembled it and comprehend the
cost and value involved with each step. For instance, if cutting costs is main priority,
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should assess every link value chain from that perspective. Which procedures
might be more effective? Exist any that could be deleted or outsourced in order to
drastically cut expenses but still produce little value?
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2.3.4 Benchmarking
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Figure: Meaning of Benchmarking

Source: https://image.slidesharecdn.com/benchmarking-120314080128-
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phpapp01/85/benchmarking-2-320.jpg?cb=1659377093
Comparing organization’s processes to best industry practises in order to detect

performance gaps and create a competitive edge is known as benchmarking in
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business.
Any process, strategy, job function, or product in business can be benchmarked.

To identify issue areas, the method primarily concentrates on metrics including quality,
time, cost, effectiveness and customer satisfaction. Businesses in various industries
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can benefit from benchmarking.
Benchmarking is the process of evaluating company’s performance against that

of other businesses in sector or the general market. Any business’s product, process,
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function, or strategy can be benchmarked. Benchmarking projects frequently focus

on time, quality, cost, and effectiveness metrics as well as customer satisfaction. The
goal of benchmarking is to evaluate business operations against those of rivals in order
to come up with suggestions for enhancing procedures, methods and technology in
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order to lower expenses, boost revenue and improve client retention and satisfaction.
Benchmarking is a crucial part of quality and continuous improvement programmes like
Six Sigma.

Marketing
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Figure: What is Benchmarking? Types and Limitations of using it

Source: https://efinancemanagement.com/wp-content/uploads/2014/07/
Benchmarking.png
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Why Benchmarking is Extremely Useful

It’s critical to realise that benchmarking is not a fast fix for achievement. Instead,
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it’s a continuous process that business owners can depend on to find any potential
performance problems. Benchmarking entails taking a step outside of a company to
look at how other companies attain high performance levels and the procedures they
employ to keep their success. Remember that benchmarking shouldn’t be a one-time
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activity; rather, it should be a crucial part of company’s goal to close the performance
gap and uphold procedures that will support the expansion and success of the
company. Discover why many companies decide to engage in benchmarking now they
are aware of its function in company.
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Improve Company Efficiency and Effectiveness

Benchmarking is useful not just for gaining a deeper understanding of rivals but
also for enhancing the productivity and effectiveness of own company. Look closely at
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the performance of company. Do marketing strategy, promotion strategies and sales

meet goals? If not, the equation might be lacking something. Businesses can gain the
knowledge and resources they need through benchmarking to improve their overall

productivity and effectiveness. This is especially important for some business kinds,
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especially service-based enterprises.
Improve the Quality of Products Sold By a Business
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To give customers the greatest products available, have probably invested a lot of
time, money and resources. The value and functionality of a product, however, might
change over time due to changes in the industry, emerging trends and technologies and
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other alterations in the environment.
Benchmarking is a popular tool used by businesses to raise the calibre of their
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offerings. This frequently entails examining the products of their rivals to ascertain how
they perform better than comparable things. A company’s products may be improved as
a result, which may ultimately impact customer happiness and its financial performance.
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Track the Progress of Business Goals and Objectives
The first step in growing business is to carry out the necessary research and
prioritise making improvements. Will also need to determine how to determine
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success in order to make sure continue with goal. Benchmarking could be useful for
tracking the progress of company’s goals and objectives. A benchmark is more than
just a rating because it indicates the performance difference that many organisations
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encounter. By benchmarking, can see how this gap gets smaller over time as
business gets closer to its goals.
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Discover New Opportunities for Rapid Growth
Do this will ever feel as though business is stagnating or not developing at the
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necessary rate to stay up with contemporary trends and developments in the market?
This is a prevalent worry for companies across all sectors. Businesses frequently turn
inside to achieve success when they ought to also turn outward. This might can figure
out why other companies are succeeding by observing them and can then create
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a new strategy to boost performance to keep up with or outperform rivals. Business

organisations might find fresh chances to boost growth by using benchmarking.
Motivate Staff and Hold People Accountable

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Benchmarking might have an immediate effect on individuals who are close to,
such as staff. Over time, employees could become too acclimated to their work, which
could result in stagnation.
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The performance of employees may gradually deteriorate due to boredom or a lack

of challenge in their work. Benchmarking could be an inspiration. It could encourage
workers to work hard to achieve goals. By employing the benchmarking tool, people
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can be held accountable for their actions—or lack thereof. Can set future expectations
by making sure staff members are aware of what “great performance” entails.
Boost the Performance of Business Sales

Initially company may succeed or fail based on how well sales perform. Many
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business owners, however, lack the knowledge necessary to comprehend why their
sales have declined over time.

When compare the sales data to those of competitors, this can discover a lot about
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firm, including how much more other businesses sell than they do, the size of other
sales teams and whether or not other businesses have partnered with larger ones.
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Additionally, this might discover that rivals provide benefits that do not, such giving
their sales employees extra vacation days or paying those more to incentivize better
work.
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The Limitations of Internal Benchmarking
While it’s important to measure and monitor performance for all critical business
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processes, organisations should be wary of taking action based solely on an internal or
insular view of their operations. A firm that is preoccupied with itself easily loses track of
competitors and broader-world innovations and the changing demands of customers.
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Strategic Benchmarking
Looking outside of own industry for the best-in-class performance of specific
processes or tasks is a great approach to push the company to reconsider ingrained
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beliefs and procedures. For instance, Southwest Airlines is renowned for studying
the procedures, methods and rates of car racing pit crews in order to improve the
turnaround time of their aeroplanes at the gate. According to reports, the results of
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this benchmarking study assisted Southwest in restructuring its gate maintenance,
cleaning and customer loading procedures, which resulted in annual cost savings for
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the corporation of millions of dollars.
Benchmarking Data Is Often Available for Purchase

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Many industries and industry- or consumer-related organisations publish

comparative data invaluable to the benchmarking process. For example, consumers
interested in the quality of new or used cars can look to the organization that publishes
Consumer Reports for its detailed testing and reporting results on new and used cars.
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Benchmarking Examples
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Figure: 7 Different Types of Benchmarking

A company looking to enhance its customer service procedures may contrast

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its own procedures and KPIs with those of its most successful rival. It may begin
enhancing its procedures to boost performance if it discovers unfavourable gaps
or variances in measures. In some industries, the company may send staff in as
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customers to obtain firsthand experience. The company will monitor and evaluate the
operations of the competition.
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A chain of quick-service/drive-thru restaurants is a nice illustration. It will research
the drive-thru procedures of major rivals because it depends on prompt and accurate
service to maximise efficiency, reduce costs and increase profits. The company will be
able to boost its earnings with every additional second without compromising consumer
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satisfaction. Competitors have continually innovated the layout of their drive-thru
operations over time in an effort to outperform one another, including the number of
windows, the menu, the speaker board and the ordering procedures. They are always
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keeping an eye on one another and setting benchmarks.
One firm, Pal’s Sudden Service, a small hamburger and hot dog chain and a
Baldrige Quality Award winner, is so successful at achieving best-in-class performance
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for drive-thru and overall restaurant operations, that it has opened an educational
institute to train other organisations. Many companies in the fast-food market use Pal’s
as a best-in-class benchmark for their own operations.
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Case Study
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Starbucks
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The value chain notion can be better explained and understood by looking at
Starbucks (SBUX). In the year 1971, there was only one Starbucks location in Seattle.
From that point on, it developed into one of the most recognisable brands in the entire
globe. The aim of Starbucks is to “inspire and nurture the human spirit-one person, one
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cup, and one neighbourhood at a time,” according to its website.
Starbucks’ Primary Activities
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Porter’s value chain analysis discusses five primary activities.
Inbound Logistics
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Starbucks’ inbound logistics refer to the process through which specially hired
coffee buyers choose the best coffee beans from growers in Latin America, Africa, and
Asia. In the case of Starbucks, the green or unroasted beans are purchased by the
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company’s purchasers directly from the plantations. These are delivered to storage
facilities, where the beans are then dried, roasted, and packaged.
Starbucks’ unique roasting and packaging processes add value to the beans,
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which helps to raise their retail price. The beans are subsequently sent to distribution
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facilities, some of which are owned by the corporation and others of which are run by
other logistical firms. The business does not outsource its sourcing, guaranteeing high
standards beginning with the coffee bean selection.
Operations
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Starbucks has direct company-owned outlets or businesses with a licence in more

than 80 markets. (Starbucks deviates from the norms of typical franchising.) Globally,
the corporation operates more than 32,000 outlets. In addition, it owns a number of
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brands, such as Teavana, Seattle’s Best Coffee, and Evolution Fresh. According to its
financial filings, during the first half of its fiscal year 2020, the company’s company-
operated stores contributed 81% of its total net sales, while licenced stores contributed
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11%.
Outbound Logistics
In the product sales process for Starbucks, intermediaries are either scarce or
nonexistent. Stores are where the vast majority of the goods are sold. Distribution to
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retail outlets and storage, however, are crucial.
Sales and Marketing

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Starbucks puts more money on providing top-notch customer service and high-
quality goods than it does in aggressive marketing. However, the business engages in
need-based marketing operations during the introduction of new products by providing
samples in the vicinity of the stores.
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Service
Through its in-store customer service, Starbucks tries to increase customer
loyalty. Giving customers a distinctive Starbucks Experience has always been one of
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Starbucks’ defining retail goals.
A crucial link in the value chain that contributes to the distinctiveness of its services
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is service training. Making drinks for consumers creates a significant amount of value.
Starbucks’ Support Activities
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Porter outlines four kinds of support activities that can be important in value chain
analysis.
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Infrastructure
This covers the divisions needed to maintain the company’s retail locations, such
as management, finance, legal, etc. In its corporate offices, Starbucks has business
managers on staff. Additionally, it has store managers on-site who assist in managing
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attractive, well-designed stores that are complemented by excellent customer service
offered by the committed team of employees wearing green aprons.
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Human Resource Management
The loyal personnel is seen as a crucial factor in the business’s success and
growth over the years. Starbucks provides considerable incentives and bonuses to
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keep staff motivated. Because of the company’s reputation for caring for its employees,
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there is a low employee turnover rate, which is a sign of excellent human resource
management. Employees participate in a variety of training programmes in a work
environment that fosters employee motivation and productivity.
Technology Development
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Starbucks is well known for using technology not only to engage with its consumers
but also for coffee-related procedures (to ensure consistency in taste and quality while
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also saving money). Because Starbucks cafes offer free, unrestricted Wi-Fi, many
consumers use them as temporary offices or gathering places.
Starbucks has introduced a number of venues where users can share their
experiences, make comments, and ask questions. Particularly in the area of its rewards
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programme, technology aids in the implementation of this input.
Starbucks also makes use of Apple’s iBeacon technology, which allows customers
to order drinks using the Starbucks mobile app and receive a signal when their drinks
are ready as soon as they enter the store.
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Procurement
The supply chain’s different parts all incorporate procurement. Porter refers to
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purchasing as a supporting action. Many businesses will set up general conditions,

specifications, and guidelines for all of their procurement interactions. However, there
are many different types of procurement relationships. Starbucks regards its ability to
independently source all of its coffee beans as a competitive advantage.
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1. Write the bottom line of this case?

Summary
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●● The resource capabilities and efficient use of scarce resources should be known to
strategists.
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●● Environment analysis examines patterns that are changing and how they affect
businesses.
●● This aids the strategist in formulating, creating, and issuing early warnings to
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counter risks or in formulating tactics that can turn threats into benefits.
●● It expresses the company’s future and an evaluation of the foreseeable future
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clearly.
●● Positive environmental trends create complacency, according to Clifton Garvin,
who defined environment analysis as such. That emphasises a fundamental idea:
change presents both opportunities and challenges.
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Purpose of environmental analysis
◌◌ To describe the environment that may have an impact on the business.
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◌◌ Recognizing threats and being ready to respond to them effectively.
◌◌ To recognise opportunities and be ready to take advantage of them quickly.
◌◌
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To identify competitive strengths and weaknesses.
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◌◌ To understand market competition and how to compete more successfully.
◌◌ To identify the organization’s stakeholders and their needs.
Glossary
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●● Environment Analysis in Business

By conducting an environmental analysis, organisations can identify internal and
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business. By considering factors like the economy and technology, businesses

can anticipate potential possibilities and difficulties. By knowing how to do an
environmental analysis, may develop a profitable marketing strategy for the
business.
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●● Identifying: In order to strengthen the position of the corporate entity in the market,
it is first necessary to identify the elements that affect it. At many levels, including
the firm level, market level, national level and global level, the identification is
carried out.
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●● Scanning: As all the elements discovered in the previous phase have the same
degree of impact on the corporation, scanning indicates the process of critically
analysing the factors that significantly affect the business. Once the critical
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elements have been determined, tactics can be developed to enhance it.

●● Analyzing: In this step, all environmental aspects are carefully analysed to
ascertain their impact on various business levels and the company as a whole.
Benchmarking and the Delphi technique and scenario building are some of the
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various tools accessible for the analysis.

●● Forecasting: The impact of the factors must be predicted after identification,

inspection and analysis. Environmental analysis is a continuous process that uses

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a holistic approach to cover the entire horizon rather than just a small portion of it.
It continuously scans the influences affecting the corporate environment.
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●● Internal environment:
The internal environment of a company or organisation is closely related to its
human resources and the way that employees carry out their duties in line with its
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objective. Planning and management procedures can regulate and alter the internal
environment to some extent.
●● External Environment Scanning
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External elements are the components that are independent of the commercial
association. Even though these elements are external to the association, they have
an impact on management’s operations. Both macro environmental and micro
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environmental elements can be classified as external influences. Legal, political,
social, cultural, demographic and technological aspects of the macro environmental
are included. Suppliers, organisations, consumers, marketplaces and rivals are
examples of micro environmental influences.
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●● Political Factors
Political factors, broadly speaking, are those that are influenced by governmental
r
acts and policies. They include, but are not limited to, things like corporate taxation,
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other fiscal policy initiatives, trade disputes, antitrust and other anti-competitive
challenges and free trade difficulties.
●● Social Factors
Social factors tend to be more difficult to quantify than economic ones. They refer to
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shifts or evolutions in the ways that stakeholders approach life and leisure, which in
turn can impact commercial activity.
●● Technological Factors
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In today’s business landscape, technology is everywhere – and it’s changing rapidly.

Management teams and analysts alike must understand how technological factors
may impact an organization or an industry
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●● Environmental Factors
Environmental factors emerged as a sensible addition to the original PEST
framework as the business community began to recognize that changes to our
physical environment can present material risks and opportunities for organisations.
m
●● Legal Factors
Legal factors are those that emerge from changes to the regulatory environment,
)A
which may affect the broader economy, certain industries, or even individual
businesses within a specific sector.
●● Remote environment:
The remote environment consists of a set of forces that originate beyond a firm’s
(c
operating situation. These comprise political, economic, social, technological,

and legal forces which create opportunities, threats, and constraints for the firm.

The operating environment, which has a direct impact on the operations of a firm,
Notes
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includes all factors which a firm faces while sourcing its inputs and while marketing
and selling its outputs. The competitors, customers, suppliers, and the labor market
constitute the operating (competitive) environment.
in
●● Porter’s Approach to Industry Analysis
Every person in business usually does a lot of research and makes a lot of plans
nl
before starting a business. One of the most important among such aspects is to
conduct an industry analysis. It can provide the entrepreneur with an idea regarding
the growth of his products or services and the amount of competition he has to face
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from others.
Michael Porter’s Five Forces is one such tool which can be used to evaluate the
five important factors regarding the growth of the industry. It helps the entrepreneur
to get to know about the environment surrounding the industry and the necessary
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steps to be taken to get success in this market
●● Resource Based Approach
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RBV is a strategy for gaining a persistent competitive advantage. Following writings
by Birger Wernerfelt, Prahalad and Hamel, Barney, J., and others, the thought
behind this method began to take shape in the 1980s and 1990s. Supporters of this
r
viewpoint contend that rather than focusing on the external competitive environment,
businesses should look inward to identify sources of competitive advantage
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●● Intangible assets
Intangible assets are things that don’t exist physically. However, a business may
own these resources. Trademarks, intellectual property and brand reputation are a
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few examples of intangible assets. In contrast to tangible assets, building intangible

assets takes a lot of time for businesses. As a result, it is difficult for a company’s
rivals to purchase these assets on the open market. Intangible assets are typically
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found within a corporation.

●● Value Chain
The term value chain refers to the various business activities and processes involved
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in creating a product or performing a service. A value chain can consist of multiple

stages of a product or service’s lifecycle, including research and development, sales
and everything in between. According to Porter’s definition, all of the activities that
make up a firm’s value chain can be split into two categories that contribute to its
margin: primary activities and support activities.
m
●● Benchmarking
Benchmarking is the process of evaluating company’s performance against that of
)A
other businesses in sector or the general market. Any business’s product, process,
function, or strategy can be benchmarked. Benchmarking projects frequently focus
on time, quality, cost, and effectiveness metrics as well as customer satisfaction.

(c
1. Environmental analysis is a method for locating all internal and external variables
that could affect a company’s ___________.

a. Performance
Notes
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b. Plan
c. Ploy
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d. Action
2. By conducting an environmental analysis, organisations can identify internal and
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_________
a. Business
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b. Agenda
c. Rule
d. Programme
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3. Environmental ___________assist companies in identifying prospective effects that
could present a chance or a hazard to them
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a. Organising
b. Directing
c. Evaluations
d. Actions
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4. In order to strengthen the position of the corporate entity in the market, it is ______
necessary to identify the elements that affect it.
a. Secondary
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b. Territory
c. First
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d. last
5. The internal environment of a company or organisation is closely related to its
human resources and the way that employees carry out their duties in line with
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its________.
a. Goal
b. Tact
c. Aims
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d. objective
6. The ___________business environment comprises of more general forces that
)A
have an impact on other players in the micro-environment in addition to the start-up.

a. Internal
b. Mixed
c. External
(c

7. The best business _______with the best technology may still fail tragically if other
Notes
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circumstances such as new laws, altered government policies, or an economic
crisis in the host nation occur.
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a. Programme
b. Plan
c. Outcome
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d. Role
8. A framework called _______analysis enables us to assess the start-state up’s in
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reference to the external environment.
a. PESTEL
b. SWOT
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c. ESOP
d. LOC
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9. __________factors, broadly speaking, are those that are influenced by governmental
acts and policies
a. Social
b. Political r
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c. Environmental
d. Technological
10. Economic factors ___________to the broader economy and tend to be expressly
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financial in nature.
a. Relate
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b. Narrate
c. Experiences
d. connect
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11. Social factors tend to be more ______to quantify than economic ones.
a. Positive
b. simple
m
c. Difficult
d. Complex
12. Environmental factors emerged as a sensible__________ to the original PEST
)A
framework as the business community began to recognize that changes to our

physical environment can present material risks and opportunities for organisations.
a. Addition
b. Double
(c
c. Subtraction

d. multiplication
Notes
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13. Legal factors are those that emerge from changes to the regulatory environment,
which may affect the broader economy, certain industries, or even individual
in
businesses within a specific_____.
a. Size
b. Sector
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c. Area
d. Location
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14. Advance assessment of the extensive positive and negative effects of the external
environment and its elements is required for an enterprise’s ___________.
a. Success.
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b. Goalmouth
c. Failure
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d. result
15. PESTLE analysis consists of various ________that affect the business environment
a. Sources
b. Factors
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c. Resources
d. locations
16. Michael Porter’s ______Forces is one such tool which can be used to evaluate the
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five important factors regarding the growth of the industry.

a. One
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b. Two
c. Four
d. Five
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17. Internal analysis is a prime example of environmental _________in strategic

management.
a. Formulation
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b. Scanning
c. Planning
d. evaluation
)A
18. Intangible_______ are things that don’t exist physically.

a. Resources
b. Capitals
(c
c. Assets
d. liabilities

19. The term _______ chain refers to the various business activities and processes
Notes
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involved in creating a product or performing a service
a. Value
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b. Systematic
c. Productive
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20. Benchmarking is the_________ of evaluating company’s performance against that
of other businesses in sector or the general market
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a. Chart
b. Process
c. Feature
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d. practice
Exercise
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1. Briefly summarize what you understand by the general environment and its
importance for business.
2. r
Explain what is external analysis and how is it connected to strategy formulation?
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3. Briefly explain the PESTEL framework.
4. Discuss the role of McKinsey 7s model in analyzing external environment.
5. Identify an industry of your choice and do a PESTEL analysis. Draw up few inference
points.
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Learning Activities
1. Draw a diagram of tools of environment analysis.
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2. Elaborate PESTEL with the help of a figure.

3. List down all components of Internal & External Environment of Arvind Mills &
identify its strengths & Weaknesses
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1. a 2. a
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3. c 4. c
5. d 6. c
7. b 8. a
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9. b 10. a
11. c 12. b
13. b 14. a
(c
15. b 16. d
17. b 18. c

19. a 20. b
Notes
e
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1. Basava, K. D. (2019). Business Environment. Hubli: Vidyavahini Prakashan.
2. Dr. M. L. GULEDGUDD, P. S. (2019). Business Environment. GADAG: Sri Sai
Publications.
nl
3. Barney, J. B. (1991). Firm resources and sustained competitive advantage.
Journal of Management, 17, 99–120.
4. Box Office Mojo. (2014). Pixar Total Grosses. Retrieved from http://
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w w w. b o x o f f i c e m o j o . c o m / f r a n c h i s e s / c h a r t / ? v i e w = m a i n & i d = p i x a r.
htm&sort=gross&order=ASC&p=.htm
5. Chi, T. (1994). Trading in strategic resources: Necessary conditions,
ty
transaction cost problems, and choice of exchange structure. Strategic
Management Journal, 15(4), 271–290.
6. Lee, A. (2013). Disney and Pixar – Synergy Strategies. Retrieved from http://
si
alexyllee.wordpress.com/2013/02/21/disney-and-pixar-synergy-strategies/
7. Selznick, P. (1949). TVA and the grass roots. Berkeley, CA: University of
California Press.
r
8. Selznick, P. (1952). The organizational weapon. New York, NY: McGraw-Hill.
ve
9. Selznick, P. (1957). Leadership in administration. New York: Harper
10. Shaughnessy, H. (2013). Apple Remains World’s Most Admired Company,
Followed by Google and Amazon. Retrieved from http://www.forbes.com/sites/
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haydnshaughnessy/2013/02/28/apple-remains-worlds-most-admired-followed-
by-google-and-amazon/
11. Szalai, G. (2011). Disney: ‘Pirates of the Caribbean’ Merchandise Has Made
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$1.6B in Sales. Retrieved from http://www.hollywoodreporter.com/news/disney-

pirates-caribbean-merchandise-16b-95393
12. Cherunilam, F. (2009). Business Environment- Text & Cases. Mumbai:
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Himalaya Publishing House

13. I. M. Cockburn, R. M. Henderson, and S. Stern, “Untangling the Origins of
Competitive Advantage,” Strategic Management Journal 21 (2000): 1123–1145.
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m
Saddle River, NJ: Prentice Hall, 1998).

15. D. C. Hambrick and J. W. Fredrickson, “Are You Sure You Have a Strategy?”
Academy of Management Executive 15 (2001): 48–59.
)A
Based on Wright et al., Strategic Management.

16. A. E. Singer, “Strategy as Moral Philosophy,” Strategic Management Journal 15
(1994): 191–213.
17. J. A. Trachtenberg, “Secrets of Self-Publishing: Success,” Wall Street Journal,
(c
October 31, 2011, B1, B7. 7B. Wysocki Jr., “How Dr. Papadakis Runs a
University Like a Company,” Wall Street Journal, February 23, 2005, A1; P.

Fain, “High Pay Makes Headlines,” Chronicle of Higher Education Online

Notes
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Edition, November 24, 2006.
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in
Process, eds. J. B. Quinn, H. Mintzberg, and R. M. James (Englewood Cliffs,
NJ: Prentice Hall, 1988), 14–15.
19. C. M. Ford and D. M. Gioia, “Factors Influencing Creativity in the Domain of
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Managerial Decision Making,” Journal of Management 26 (2001): 705–732.
20. H. Mintzberg, “Crafting Strategy,” Harvard Business Review 65, no. 4 (1987):
66–75.
O
21. G. Hamel, “Strategy as Revolution,” Harvard Business Review 74, no. 4
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Horizons 44, no. 4 (2001): 13–20.
ty
22. H. Courtney, J. Kirkland, and P. Viguerie, “Strategy under Uncertainty,”
Harvard Business Review 75, no. 6: 67–79.
23. G. Hamel, “Strategy as Revolution”; B. Hoffman, “What Makes a Strategy
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Brilliant?” Business Horizons (July–August 2001): 13–20.
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Management,” Academy of Management Review 6 (1981): 609–620.
r
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Industry- or Firm-Specific Factors? A New Look at the Evidence,” Strategic
Management Journal 24 (2003): 1–
26. J. S. Bain, Industrial Organization (New York: Wiley, 1968); F. M. Scherer and
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Houghton-Mifflin, 1990).
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Research,” Journal of Management Studies 31 (1994): 165–191; J. B. Barney,

“Strategic Factor Markets: Expectations, Luck, and Business Strategy,”
Management Science 42 (1986): 1231–1241.
28. It has been argued that the resource-based perspective does not qualify as
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an academic theory. For details on this exchange, see R. L. Priem and J.

E. Butler, “Is the Resource-Based ‘View’ a Useful Perspective for Strategic
Management Research,” Academy of Management Review 26 (2001): 22–40;
J. B. Barney, “Is the Resource-Based ‘View’ a Useful Perspective for Strategic
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Management Research? Yes,” Academy of Management Review 26 (2001):

41–56.
29. J. B. Barney, “Looking Inside for Competitive Advantage,” Academy of
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Management Executive 19 (1995): 49–61.

30. W. W. C. Chung, M. F. S. Chan, and T. S. Leung, “A Framework of
Performance Modeling for Dynamic Strategy,” International Journal of
Business Performance Management 8 (2006): 62–76; N. Foss and I. Ishikawa,
(c
“Towards a Dynamic Resource-Based View: Insights from Austrian Capital and

Entrepreneurship Theory,” Organization Studies 28 (2007): 749–772.

31. S. L. Berman, J. Down, and C. W. L. Hill, “Tacit Knowledge as a Source of

Notes
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Competitive Advantage in the National Basketball Association,” Academy of
Management Journal 45 (2002): 13–32.
in
32. E. J. Zajac, M. S. Kraatz, and R. K. F. Bresser, “Modeling the Dynamics
of Strategic Fit: A Normative Approach to Strategic Change,” Strategic
Management Journal 21 (2000): 429–453.
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33. C. A. Lengnick-Hall and J. A. Wolff, “Similarities and Contradictions in the Core
Logic of Three Strategy Research Streams,” Strategic Management Journal 20
(1999): 1109–1132; O. E. Williamson, “Strategy Research: Governance and
O
Competence Perspectives,” Strategic Management Journal 20 (1999): 1087–
1108.
34. . Chen and K. W. Ho, “Blockholder Ownership and Market Liquidity,” Journal
of Financial & Quantitative Analysis 35 (2000): 621–633; J. J. McConnell and
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H. Servaes, “Additional Evidence on Equity Ownership and Corporate Value,”
Journal of Financial Economics 27 (1990): 595–612.
35. W. J. Salmon, “Crisis Prevention: How to Gear Up Your Board,” Harvard
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Business Review 71 (1993): 68–75.
36. B. Hermalin and M. S. Weisbach, “The Determinants of Board Composition,”
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Rand Journal of Economics 19 (1988): 589–605; E. F. Fama and M. C. Jensen,
“Separation of Ownership and Control,” Journal of Law and Economics 26
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(1983): 301–325; M. S. Weisbach, “Outside Directors and CEO Turnover,”
Journal of Financial Economics 20 (1988): 431–460.
37. P. A. Gibbs, “Determinants of Corporate Restructuring: The Relative
Importance of Corporate Governance, Takeover Threat, and Free Cash Flow,”
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Strategic Management Journal 14 (1993): 51–68. chapter 1 Fundamentals of

Strategic Management 17
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38. National Association of Corporate Directors, “NACD Director Compensation

Report 2010–2011,” April 15, 2011, http:// www.directorship.com/compensation-
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10, 2003, I.
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Journal, January 28, 2005, B1, B4. 31. J. H. Morgan, “The Board of Directors Is
No Longer Just a ‘Rubber Stamp,’” TMA Journal 19, no. 5 (1999): 14–18.
m
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Management Journal 17 (1996): 41–53; P. Stiles, “The Impact of Board on
Strategy: An Empirical Examination,” Journal of Management Studies 38
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(2001): 627–650.
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“Target Cooks Up Rebound Recipe in Grocery Aisles,” Wall Street Journal, May
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12, 2009, B1, B2.

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10, 2003, I; W. Royal, “Impeach the Board,” Industry Week, November 16,
1998, 47–50; C. Torres, “Firms’ Restructuring Often Hurt Foreign Buyers,” Wall
Street Journal Interactive Edition, May 13, 1996; M. L. Weidenbaum, “The
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Evolving Corporate Board,” Society (March–April 1995): 9–16.
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Diversity on Strategic Change,” Strategic Management Journal 15 (1994): 241–
250.
45. M. S. Mizruchi, “Who Controls Whom? An Examination of the Relation
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Between Management and Board of Directors in Large American
Corporations,” Academy of Management Review 8 (1983): 426–435.
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Chips?” Harvard Business Review 71 (1993): 78.
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47. J. A. Conger, D. Finegold, and E. E. Lawler III, “Appraising Boardroom
Performance,” Harvard Business Review 76, no. 1 (1998): 136–148.
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48. T. K. Das and B. Teng, “Cognitive Biases and Strategic Decision Processes:
An Integrative Perspective,” Journal of Management Studies 36 (1999): 757–
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the Relationship Between Top Team Management Heterogeneity and Firm
Performance,” Strategic Management Journal 23 (2002): 275–284.
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49. A. J. Hillman and M. A. Hitt, “Corporate Political Strategy Formulation: A Model
of Approach, Participation, and Strategy Decisions,” Academy of Management
Review 24 (1999): 825–842.
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Saddle River, NJ: Prentice Hall, 1998).
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23, 2007, B1, B6.

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to a Chosen Course of Action,” Organizational Behavior and Human
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m
asia.html (accessed October 13, 2011).

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)A
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Module - III: Strategic Formulation and Choice

Notes
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●● SWOT Analysis for Strategic Choice
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●● Understanding Balance Scorecard Approach
●● Example of Balance Scorecard Approach
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●● Formulating Corporate Strategies
●● Porter’s Competitive Strategies
●● Red and Blue Ocean Strategies
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●● Strategy Formulation at Functional Level
●● Multi-Business Strategy
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Introduction
An in-depth investigation of a company’s market presence based on both internal
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and external factors is known as a scenario analysis. It looks at a company’s existing
and potential customers and how they react to its goods and services. An analysis of
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the present business environment and a company’s capabilities are also included.
3.1 Situation Analysis

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Based on the choices made, an analysis can predict the outcomes a business can
expect, allowing it to modify its tactics in order to achieve its objectives. A situational
analysis can disclose a lot of crucial information about a company, including:
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The viewpoints and experiences of stakeholders and customers
◌◌ A company’s strengths and weaknesses;

◌◌ How it is leveraging market trends;
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◌◌ How it compares to competitors;

◌◌ What is preventing a firm from achieving its targeted goals?
◌◌ And the current initiatives in place to address the problem (es)
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A business should run a situational analysis periodically—the market is ever-

evolving as customers’ needs and preferences change. A regular situation analysis
provides the information a company needs to create a course of action to achieve its
goals.
)A
Components of a Situation Analysis

If individual plan isn’t producing the desired outcomes, analysis can help all adjust
and make course corrections. Analysis can show how individual firm is working. Several
(c
elements make up a situational analysis:

The Business
Notes
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A smart place to start is to evaluate a company’s vision, strategy, and goals—and
whether or not they are being met. Examining the company’s performance by looking
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at sales, market share, and customer retention offers an insightful snapshot that
shows whether the organisation is succeeding in its objectives. All can use it to assess
individual competitors’ strengths and market share.
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Product and Services
A critical part of a situation analysis is analysing present products and services as
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well as upcoming product launches. To ascertain how viable a new product or service
will be, market research is required. The target market can be identified and ways to
enhance a company’s offers can be determined through a market analysis done with
prospective customers who provide feedback or thoughts about the product, service,
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or pricing. Examine products and services independently to determine which ones best
satisfy the demands of individual customers and which ones require adjustment.
Distribution
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The market study identifies the target market and the level of interest in a
company’s goods or services. The competitive analysis contrasts individual company
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with others that are like it. Important details about individual company’s distribution
routes can be learned from analysing both. The distribution section of a situation
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analysis examines individual product marketing strategy and compares it to that
of individual rivals to identify the most effective distribution channels for individual
company.
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Opportunities
Market opportunities are represented by unmet or underserved needs. The
success of a corporation depends on its ability to take that market share. But a
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company must first be aware of its advantages and disadvantages in order to

successfully pursue an underserved market. How well individual company can take
advantage of opportunities can be determined using a SWOT analysis, which considers
individual strengths, weaknesses, opportunities, and threats. A SWOT analysis often
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displays a list of data and is rather easy to generate.
◌◌ Create four categories: strengths, weaknesses, opportunities, and threats.

◌◌ The competitive advantages, successful internal systems and processes, as
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well as resources like technology, patents, knowledge, and cash, should all be
listed under the strengths category.
◌◌ Weaknesses include internal elements that prevent individual company from
)A
being more competitive, such finance shortages or staffing shortfalls.

◌◌ Opportunities are outside forces that can benefit individual business, such as
legislative changes, impending media attention, and exceptional occasions.
◌◌ Threats are outside forces over which individual business has no control.
(c
List the relevant details in each category box. Using a brainstorming process
is a great way to put thoughts and facts on paper. Create an overall insight for each
category using the ideas from the brainstorming sessions and save them in the

appropriate boxes. Once everything is finished, compile all the insights and write a
Notes
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summary. When conducting a SWOT analysis, opportunities and threats require an
external study while strengths and weaknesses come from an inside assessment of the
company.
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Customer Analysis
To truly understand individual clients, do thorough research. Gather information
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about the demographics, locations, interests, and difficulties of individual customers.
Once all have a solid understanding of individual current clientele, all may pinpoint other
potential clients as individual target market and develop an efficient marketing strategy.
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Knowing individual target market’s needs, tastes, and behaviours will help all choose
the best approaches to addressing them.
Competitors
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Can evaluate how well the company is doing by looking at individual top rivals.
Individual organisation can adjust to compete more successfully by identifying and
contrasting the competitive advantages of various companies. All can modify individual
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company’s strategy to get an advantage by investigating the goods or services, sales,
and marketing tactics of competitors. Competition study should include information on a
competitor’s market share as well as its advantages and disadvantages. All can use the
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SBA’s list of business statistics in individual analysis.
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Collaborators
Many company operations depend heavily on partnerships and collaborations.
They consist of individual company’s raw material suppliers, business partners, and
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distributors who might oversee individual company’s manufacturing processes, vendor

relationships, and supply chain. Examine partnerships in order to determine their
sturdiness and longevity. A corporation can gain insight into the dependability of these
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partnerships by reviewing contracts and examining whether goods and services have
historically been supplied as promised.
Current Business Environment

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A situational analysis should look at both the internal and external factors affecting
a company’s success. The economy, rivals, governmental policies, and regulations are
examples of external variables. Internal elements that influence a firm include company
culture, people, business resources, and cash management.
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5C Situation Analysis Example

The 5C approach may be the simplest way to conduct a situational analysis
)A
that takes into account both internal and external elements that have an impact on
a firm. The 5Cs stand for corporation, customers, rivals, allies, and climate. The firm
component of a 5C study comprises information about the company’s mission and
goals, as well as its market position, distribution, opportunities, and goods. Key data on
prospective clients, the target market, and the opportunities a business should follow
(c
through a marketing plan are provided by the consumers. The section on competitors
indicates a company’s strengths and areas for improvement based on those of its

rivals. Partnerships between collaborators enable the production of goods and their
Notes
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distribution. Government policy and the economy are examples of climate-related
factors.
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3.1.1 SWOT Analysis for Strategic Choice
For a company to succeed, it must understand its strengths and weaknesses in
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its environment. A SWOT analysis is one of the most common tools companies use to
analyse their current condition and position themselves for the future.
O Source: https://corporatefinanceinstitute.com/resources/knowledge/strategy/swot-analysis/
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)A
(c

What is a SWOT Analysis?

Notes
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Strengths, Weaknesses, Opportunities, and Threats is abbreviated as SWOT.
The SWOT analysis enables all to identify individual competitive advantages, areas
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for business expansion, and weak points. All can use this simple tool to find out what
possibilities and risks individual business faces. The procedure considers both the
internal and external concerns that individual business must deal with.
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While opportunities and dangers typically pertain to outside causes, individual
organisation’s strengths and weaknesses are frequently internal. Due of this, the SWOT
Analysis is occasionally referred to as an internal-external analysis, and the SWOT
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matrix is occasionally referred to as an IE matrix.
What are the benefits of a SWOT analysis?
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What makes SWOT particularly powerful is that, with a little thought, it can help
all uncover opportunities that all are well placed to exploit. By understanding the
weaknesses of individual business, all can manage and eliminate threats that might
otherwise catch all unaware.
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By using the SWOT framework to look at individual self and individual competitors,
all can craft a strategy that helps all distinguish individual self from individual
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competitors and better compete against them in individual market.
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How do all complete a SWOT Analysis?
Typically, a SWOT analysis is finished by obtaining feedback from the team during
a workshop. Frequently, a consultant in strategy planning leads these sessions. Prior to
starting a SWOT analysis, it may be helpful to compile the following data:
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Outside of individual business:
◌◌ What are the current business trends in individual sector?

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◌◌ Exactly what is individual market share?

◌◌ Who are individual principal rivals?
◌◌ How can all distinguish individualself in the market?
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◌◌ How do individual clients see all?

◌◌ What perils and traps are in store for all?
Within individual Business:
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◌◌ Performance in sales and marketing;

◌◌ Financial performance and trends;
◌◌ System and process effectiveness;
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◌◌ Key internal individuals,

◌◌ competences,
◌◌ governance structure;
◌◌ The culture and strategy of individual business
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◌◌ Individual values, mission, and vision

With this information in hand, Will be ready to assess individual company’s internal
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strengths and weaknesses, after which all can focus on external factors that could
impact individual company.
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Strengths- Make a list of individual company’s internal strengths. These are any
competitive advantage, skill, proficiency, experience, talent or other internal factor that
improves individual company’s position in the marketplace and can’t be easily copied.
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Examples include:
◌◌ solid financing
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◌◌ a superior brand
◌◌ valuable intellectual property
◌◌ uperior technology
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◌◌ modern equipment and/or machinery
◌◌ a well-trained sales team
◌◌ low staff turnover
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◌◌ management expertise
◌◌ operational efficiency
◌◌ high customer retention
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good supplier relationships
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Take into account individual strengths from both an internal and a customer
or market participant’s perspective. Additionally, if all’re having trouble figuring out
individual strengths, try making a list of the qualities that define individual company.
Hopefully, some of these will be assets. Consider individual weaknesses in respect
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to individual competition when examining individual strengths. For instance, if all of

individual competitors offer high-quality products, having a high-quality production
method is not only necessary but also a weakness in individual company’s market.
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Weaknesses- These are the elements that make it harder for individual business to
accomplish its goals.
Examples include:
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◌◌ Untrustworthy vendors
◌◌ dated machinery or equipment
◌◌ ineffective marketing initiatives
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◌◌ A shortage of funding
◌◌ Management failings
◌◌ Lack of knowledge
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Once more, think about this both within and externally: Do other people seem to
find flaws that all are unable to see? Do individual rivals fare any better than all? When
identifying these shortcomings, be as truthful as all can. Realistically, it’s preferable
to face any harsh truths right away. All cannot make judgments that will strengthen
individual business if all ignore individual vulnerabilities.
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Opportunities—Opportunities are external factors that allow individual business to

grow and be more profitable.

Examples include:
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◌◌ new potential markets
◌◌ innovations
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◌◌ technological advances
◌◌ consumer trends
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◌◌ support from governments, the community or business partners
Opportunities should reference demand for individual products and services or
development potential.
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Threats—Threats are external obstacles individual business must overcome.
Examples include:
◌◌ a declining economy
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◌◌ a consumer shift to other products
◌◌ technological change
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◌◌ a labour shortage
◌◌ community opposition
◌◌ legal or regulatory changes
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It’s often useful to take a close look at individual competitors’ strengths to identify
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external threats to individual company. Again, be as honest as possible. A SWOT
analysis doesn’t have to be a long, complex document. Two or three pages of point-
form notes are usually sufficient to focus on essential findings.
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Source: https://www.bdc.ca/globalassets/digizuite/30009-xxl-960x759-table-swot.
png?v=49b7c2

What is a SWOT Analysis used for?

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A SWOT analysis will put all in a position to take advantage of possibilities and
develop winning plans. Understanding individual internal environment clearly and
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realistically will help all find strategies to improve client satisfaction, accomplish
individual goals, and reinforce vulnerable areas that affect individual performance. All
can better prepare for opportunities (such as shifting demographics, the announcement
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of a new residential development nearby, or a new trade agreement) and threats (such
as emerging technologies, fluctuating exchange rates, the loss of a significant local
employer, or a new trade agreement) that will affect individual business in the years to
come by analysing individual external environment.
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After identifying these opportunities, threats, and opportunities, all should
collaborate with individual team to build a suitable response by responding to the
questions in the table below.
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Source: https://www.bdc.ca/globalassets/digizuite/30012-xxl-960x425-table-
swot-2.png?v=49b7c2
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3.1.2 Understanding Balance Scorecard Approach

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Figure: What is Balanced Scorecard (BSC)

Source: https://www.investopedia.com/thmb/TNrOI0ivUH0NxW5HQiKfJd
YEGis=/500x0/filters:no_upscale ():max_bytes (150000):strip_icc ():gifv()/
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Balancedscorecard_final-7c9dbd1f0c534e8788b70df7c700c693.png
What Is a Balanced Scorecard (BSC)?

A strategic management performance indicator known as the balanced scorecard

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(BSC) is used to identify and enhance various internal business activities and the
results they have on the outside world. Balanced scorecards are a widespread tool
used by businesses in the United States, the United Kingdom, Japan, and Europe
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to measure and provide feedback to organisations. In order to provide quantitative
results, data collecting is essential because managers and executives must acquire
and analyse the data. The decision-making of company personnel for the future of their
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organisations can be improved with the help of this knowledge.
Key Takeaways
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●● A balanced scorecard is a performance indicator used to pinpoint, enhance, and
regulate a company’s numerous operations and outcomes.
●● David Norton and Robert Kaplan, who used earlier metric performance indicators
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and modified them to add nonfinancial information, first proposed the idea of BSCs
in 1992.
●● Although BSCs were initially created for for-profit businesses, they were later
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modified for use by charitable organisations and governmental organisations.
●● The four key business metrics that are measured by the balanced scorecard are
learning and growth, business operations, clients, and finances.
●●
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BSCs give businesses the ability to combine data into a single report, provide
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information on service and quality in addition to financial performance, and aid in
efficiency improvements.
Understanding Balanced Scorecards (BSCs)

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The balanced scorecard was initially developed by business leader and theorist
Dr. David Norton and accounting Professor Dr. Robert Kaplan. It was initially published
in 1992 in the Harvard Business Review article “The Balanced Scorecard—Measures
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That Drive Performance.” Kaplan and Norton collaborated on a one-year project

involving 12 high-performing businesses. Their study modified earlier performance
indicators to incorporate nonfinancial data.
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Originally intended for for-profit businesses, BSCs were later modified for use by
nonprofit organisations and governmental bodies. It is designed to assess a company’s
intellectual capital, which includes any exclusive knowledge, expertise, or training that
offers it a competitive edge in the marketplace. In a company, the balanced scorecard
methodology rewards positive behaviour by focusing on four distinct areas that need
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improvement need to be analyzed. These four areas, also called legs, involve:
◌◌ Learning and growth

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◌◌ Business processes
◌◌ Customers
◌◌ Finance
The BSC is used to collect crucial data, including the objectives, measures,
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initiatives, and goals that come from these four core business functions. Businesses
may quickly pinpoint the issues affecting performance and specify the strategic changes
that will be monitored by future scorecards. When considering company objectives, the

scorecard can offer information about the company as a whole. The balanced scorecard
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approach can be used by an organisation to conduct strategy mapping and determine
where value is added inside the company. A BSC can be used by a business to create
strategic objectives and activities. This can be accomplished by distributing work and
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projects among various departments of the business to increase operational and
financial efficiencies and raise the bottom line.
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Characteristics of the Balanced Scorecard Model (BSC)
Information is collected and analyzed from four aspects of a business:
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1. The examination of training and knowledge resources allows for the analysis of
learning and development. The first leg deals with how well information is gathered
and how well workers use it to create a competitive advantage within the sector.
2. By examining how well things are produced, business processes are evaluated.
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To keep track of any gaps, holdups, bottlenecks, shortages, or waste, operational
management is examined.
3. Customer opinions are gathered to determine whether customers are satisfied with
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the standard, cost, and accessibility of goods and services. Customers offer input
on how happy they are with the present products.
4. Financial information, including sales, outlays, and income, is utilised to analyse
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financial performance. These financial measures could be expressed as monetary
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values, financial ratios, variations from the budget, or income targets.
What are the four Balanced Scorecard Perspectives?
The balanced scorecard approach examines performance from four perspectives.

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◌◌ Financial analysis, which takes into account indicators including operating

income, profitability, and return on investment.
◌◌ Client analysis, which examines spending on customer retention and service.
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◌◌ Internal analysis, which examines the connections between internal corporate

procedures and strategic objectives.
◌◌ The learning and growth viewpoint evaluates the information system as well
as staff retention and satisfaction.
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Figure : Balanced Scorecard

Source: https://hrgoals.files.wordpress.com/2017/07/balanced-fdk.png?w=840
Elements of a Balanced Scorecard

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Kaplan and Norton provided instructions on how to create a balanced scorecard
in their 1993 publication. They described a process for creating balanced scorecards
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that is applicable to business units and explains what they refer to as “a typical project
profile.”
Here are the eight concrete steps they suggest in brief.
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1. Preparation. The business unit for which a top-level scorecard is appropriate
is determined by the organisation. This can be broadly defined as a business
division with its own clients, sales channels, manufacturing facilities, and
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financial objectives.
2. The first round of interviews. A balanced scorecard facilitator interviews senior
managers for about 90 minutes each to obtain input on strategic goals and
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performance measures.
3. The initial executive workshop. By agreeing on the objective and strategy
and connecting the measurements to them, top management meets with
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the facilitator to begin creating the scorecard. This may entail conducting
shareholder and customer video interviews.
4. The next stage of the hiring process. A preliminary balanced scorecard
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is created by the facilitator after reviewing, combining, and documenting
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feedback from the executive workshop and conducting interviews with each
senior executive.
5. A second workshop for executives. The vision, strategy, and provisional
scorecard are discussed by senior management, their direct reports, and
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a larger group of intermediate managers. They brainstorm implementation

strategies in small groups while also establishing “stretch targets for each of
the recommended measures.”
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6. Sixth executive workshop Senior executives develop stretch performance

targets for each metric after agreeing on the vision, objectives, and
measurements discussed in the previous two workshops. The group then
decides on an implementation strategy after this is finished.
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7. Implementation. A newly formed team executes a strategy that aims to

promote the creation of second-level metrics for decentralised units, convey
the balanced scorecard throughout the company, and link performance
measures to databases and IT systems.
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8. Regular assessments. Managers view and compile a “blue book” on the

balanced scorecard metrics on a quarterly or monthly basis. The strategic
planning process includes an annual review of the balanced scorecard
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measures.
3.1.3 Example of Balance Scorecard Approach

The BSC, often known as the Balanced Scorecard, is a framework for managing
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and implementing strategy. It establishes a connection between a vision and strategic

targets, metrics, and actions. It strikes a balance between financial metrics and

performance metrics and goals relevant to every other aspect of the organisation. It is
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a tool for managing corporate performance. A balanced scorecard (BSC) is a visual tool
used to compare an activity’s effectiveness to a company’s strategic aims. In order to
make sure that the company’s activities are in line with its overall strategy and vision,
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balanced scorecards are frequently employed during strategic planning.
It was developed to assist companies in assessing their operations with more than
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just a purely financial lens using sales, expenses, and profits. This diagram offers a fair
assessment that also considers various success vantage points. A classic balanced
scorecard looks at a company’s objectives from four different angles: Customer,
Financial, Learning and Growth, and Business Processes
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3 Balanced Scorecard Examples
The development process of the Balanced Scorecard in a company involves
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several steps, which we have summarized here:
1. Establish a clear vision of the future

2. Define the strategic objectives
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3. Determine the critical success factors
4. Choose indicators to measure and monitor performance
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5. Set goals, action plans, and initiatives
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All 5 steps for each of the 4 perspectives.
These are just a few facets of how to select indicators and define goals. We’d
like to show all three examples of the strategic maps that are created when Balanced
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Scorecard projects are being developed. These maps are used to summarise all of
the work that needs to be done by the organisation, including its goals, targets, and
indicators, as well as the initiatives and actions that need to be taken.
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1. Balanced Scorecard example: Strategic map for a Craft Brewery

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2. Balanced Scorecard example: Strategic map for a Jewelry store

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3. Balanced Scorecard Example: Strategic map for an E-Commerce Business
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The offered examples of balanced scorecards are wholly fictitious and merely
schematic. They typically include several goals and initiatives for each target. The
important thing is to understand the concept and how to use it correctly in individual
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particular business.

3.1.4 Formulating Corporate Strategies

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Source: https://cdn.slidesharecdn.com/ss_thumbnails/strategyformulation-
150108045551-conversion-gate01-thumbnail-4.jpg?cb=1420693281
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What is Strategy Formulation?
The process of formulating a strategy involves using the knowledge already at

hand to record the anticipated course of a firm and the practical procedures to achieve
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its objectives. This procedure is used to allocate resources, set priorities, align the
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entire organisation, and validate business objectives. By reviewing the justification
for goals, an effective plan can help individual organisation catch biases and track
performance using quantifiable key performance indicators (kpis). Here are five ideas
all may use to create a winning plan for individual business.
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Figure: Process of Strategy Formulation

Source : https://businessjargons.com/wp-content/uploads/2018/07/process-of-
strategy-formulation1.jpg
1. Establishing Organisational Objectives: This entails determining the organisation’s

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long-term objectives. Once the organisational objectives are known, strategic
decisions can be made.
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2. Analysis of the Organisational Environment: This include doing a SWOT analysis,
which entails determining the company’s strengths and weaknesses and monitoring
competitor activity to recognise opportunities and threats.
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3. The corporation has control over both internal and external aspects, including
strengths and limitations. On the other hand, opportunities and risks are outside
forces that the organisation has no control over. A successful company capitalises
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on its advantages, addresses its weaknesses, seeks out untapped potential and
fortifies itself against external threats.
4. Formulating quantitative goals: Creating targets that will help the organisation
achieve its short- and long-term goals. For instance, a company’s revenue increased
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this year by 30%.
5. Setting goals in relation to divisional plans: This entails establishing goals for each
department so that they are consistent with the company as a whole.
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6. Performance analysis is carried out to determine the degree of deviation between
an organisation’s actual performance and its expected performance.
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7. Strategy Selection: This is the last stage in formulating a strategy. It entails
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assessing the alternatives and choosing the best strategy among them to serve as
the organisation’s strategy.
8. The act of formulating strategies is a crucial component of strategic management
since it aids in creating viable plans for the organisation’s growth and survival in the
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competitive marketplace.
Levels of Strategy Formulation

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There are three levels of strategy formulation used in an organisation:

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●● Corporate level strategy: This level describes the objectives all have, such as
growth, stability, acquisitions, or layoffs. It focuses on the type of business all plan
to launch.
●● Business-level strategy: This level provides a response to the query of how all will
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compete. It is relevant to organisations with smaller business units, each of which

is regarded as a strategic business unit (SBU).

●● Functional level strategy: This level concentrates on how an organisation is

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going to grow. It outlines everyday operations, such as resource allocation for the
implementation of corporate and company level strategies.
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Therefore, all businesses have rivals, and one company’s ability to succeed and
establish itself above the competition is determined by its strategy.
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3.2 Formulating Business Level Strategies
Introduction
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The Greek term “stratçgos”—from stratus, which means army, and “ago,” which
means leading or moving—is the source of the English word “strategy.”
Managers use strategy to accomplish one or more of the organisation’s goals.
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A overall direction established for the business and its numerous parts to achieve
a desirable condition in the future is another definition of strategy. The process of
meticulous strategic planning yields strategy. Integrating organisational operations,
using and allocating the limited resources existent in the organisational environment,
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and achieving the current goals are all part of a strategy. When developing a strategy,
it is important to keep in mind that choices are not made in a vacuum and that any
action done by a company is likely to elicit a response from those who will be impacted,
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including competitors, clients, employees, or suppliers. The understanding of
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objectives, the unpredictability of events, and the necessity of taking into account other
people’s potential or existing actions are other definitions of strategy.
A company’s strategy outlines its objectives, goals, key policies, and plans for
achieving them. It also describes the type of business the company will conduct, the
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kind of economic and social organisation it wants to be, and the contributions it intends
to make to its shareholders, clients, and society at large.
Strategy formulation is the process of using available knowledge to record a

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business’s intended path and the practical steps needed to achieve its objectives.
This procedure is used to allocate resources, set priorities, align the entire
organisation, and validate business objectives. A successful strategy can enable
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individual organisation to share a single, distinct vision, detect biases by looking at

how goals are justified, and monitor performance with measurable key performance
indicators (KPIs).
Tips for Successful Strategy Formulation

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1. Establish a goal
2. Think on recent event
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3. Take into account trends, case studies, and data

4. Establish and clearly communicate individual goals
5. Consider strategy as a continuous process.
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Figure: Managing Strategy and Strategic Planning
Source: https://slideplayer.com/slide/10965579/39/images/12/
Formulating+Business-Level+Strategies.jpg
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3.2.1 Porter’s Competitive Strategies
What are Porter’s Generic Strategies?
Porter identified four general approaches that can be used to both categorise and
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influence corporate behaviour. They all revolve around getting a competitive edge,
therefore if all’re currently considering individual approach, it might be quite helpful to
remind individualself of the generic techniques if all want to increase individual market
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share.
As examples of “generic strategies,” these three methods can be used to create

goods or provide services across all sectors and sizes of businesses. In his book
“Competitive Advantage: Creating and Sustaining Superior Performance,” Michael
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Porter initially outlined them in 1985.
The three generic methods that Porter identified were “Cost Leadership” (no frills),
“Differentiation” (developing products and services that are distinctly valued), and
“Focus” (offering a specialised service in a niche market). The Focus strategy was then
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divided into “Cost Focus” and “Differentiation Focus,” respectively. In figure, these are
displayed.
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Porter’s Generic Strategies

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Source: data:image/ data:image/png;;base64,
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iVBORw0KGgoAAAANSUhEUgAAAQMAAADDCAMAAACxkIT5AAABrVBMVEX////
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The four strategies are called:
◌◌ Cost Leadership Strategy

◌◌ Differentiation Strategy
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Cost Focus Strategy
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◌◌ Differentiation Focus Strategy
The similarities between the tactics will be clear to all right away. Read through
each definition carefully because they are not always apparent. For instance, the term
“Cost Focus” does not necessarily imply a focus on the market’s cost advantages.
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What is the Cost Leadership Strategy?
With the help of the cost leadership strategy, a company can increase profitability,
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increase shareholder value, or invest in other areas of the business plan by focusing on
lowering the cost to deliver goods or services to customers.
When pursuing cost leadership, there are a number of things to take into account:
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◌◌ How will the cost-cutting push affect individual consumers and employees?
◌◌ Can it be maintained as all grow?
◌◌ How will all reinvest the company’s greater profits?
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◌◌ How will all supply individual product at the lowest cost compared to individual
rivals?
◌◌ Will customers receive a portion of the savings?
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◌◌ Will competitors overtake all in terms of price, or can all keep individual
position as the lowest?
For this plan, including the Five Forces analysis of individual market and taking into
account the Supplier and Buyer powers may be beneficial.
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All should evaluate the following when examining the cost leadership strategy:
◌◌ Costs of individual present suppliers

◌◌ Innovations and technology that can streamline individual procedures

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◌◌ Process efficiency and speed; • Cost and advancement of individual
workforce;
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◌◌ The management team needs members who are detail-oriented, process-
driven, analytical, and financially savvy.
What is the Differentiation Strategy?
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The Differentiation Strategy is where a business focuses on differentiating its
products or services from competitors. This focused strategy has a wide spectrum from
full product diversity to unique features within a core product.
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When pursuing differentiation, there are several things to take into account:
◌◌ How developed is the market in which individual good or service is sold?
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◌◌ What is the background of rival innovation?
◌◌ What do the comments from individual customers suggest?
◌◌ Is individual business set up with effective marketing to take advantage of new
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features?
◌◌ Why do all now close transactions or not?
◌◌ How do all now do market and demand research?
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Individual management team’s abilities - originality, lateral thinking and market
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knowledge are necessary qualities
Organisations require the following to succeed with a differentiation strategy:
◌◌ Strong research, development and innovation

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· The capacity to provide top-notch goods or services.
◌◌ Effective sales and marketing to ensure that the market is aware of the
advantages provided by the unique services.
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Large organisations pursuing a differentiation strategy need to stay agile with their
new product development processes. Otherwise, they risk attack on several fronts by
competitors pursuing Focus Differentiation strategies in different market segments.
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What is the Cost Focus Strategy?

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Figure: Focus Strategy

Source: https://www.educba.com/focus-strategy/

Businesses that employ focus strategies concentrate on certain niche markets and
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provide distinctively affordable or well-defined items for the market by comprehending
the dynamics of that market and the distinctive needs of its clients. They tend to
develop high brand loyalty among their clients since they provide customers in their
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market with a unique level of service. Because of this, rival companies are less likely to
target their specific market area.
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Once all have chosen a Focus strategy as individual primary strategy, it is still
crucial to choose whether all will pursue Cost Leadership or Differentiation: Normal
focus is insufficient on its own. To succeed with a generic Focus strategy, however, all
must make sure that all are adding something more as a result of focusing just on that
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market segment, regardless of whether all utilise Cost Focus or Differentiation Focus.
Because individual company is too tiny to serve a larger market (if all do, all run the risk
of competing against the offerings of broad market corporations with bigger resources),
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it simply isn’t enough to concentrate on just one market segment. Individual “something
extra” can help lower costs (perhaps via individual familiarity with specialised suppliers)
or increase differentiation (possibly through individual in-depth knowledge of consumer
wants).
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The Cost Focus Strategy is an evolution of the Cost Leadership Strategy.
This business strategy has two components, as the name would imply. The
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term “Focus” describes the process through which a business zeroes in on a specific
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industry or geographic region and masters the art of providing for that market. Similar
to the Cost Leadership Strategy we previously discussed, the term “Cost” refers to the
cost to the organisation producing the good or service. All should take the following into
account in addition to the cost leadership factors:
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◌◌ How large is the specialised market all’re targeting or operating in?

◌◌ Are all able to offer the good or service at a lower price than the rivals?
◌◌ Are all able to maintain the standards necessary to be the market leader in
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individual niche?
◌◌ What is the level of cost per customer to become the leader within this
market?
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This strategy has all the benefits of Cost Leadership while also providing additional
options:
◌◌ Establishing oneself as thought leaders in a field

◌◌ Creating alliances with businesses in the same sector
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◌◌ Adding credibility to individual company’s overall narrative

◌◌ Gain customer loyalty by emerging as the only reliable supplier in individual
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sector.
What is the Differentiation Focus Strategy?
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A development of the Differentiation Strategy is the Differentiation Focus Strategy.

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There are two parts, similar to Cost Focus, with one emphasising the Differentiation
aspect of the strategy and the other underlining the fact that the company is entering a
specialised market.
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Along with the variables from Differentiation, take into account the following:
◌◌ How large is the specialised market all’re targeting or operating in?
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◌◌ Can the market support differentiation?
◌◌ How big is the market in relation to the investment needed to stand out?
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◌◌ What innovative features or goods will propel individual business forward?
This tactic offers more possibilities while maintaining all the advantages of
Differentiate:
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◌◌ Cross-selling among clients in markets
◌◌ Altering the marketplace or consumers by substituting items
◌◌ Innovating additional services to sell as auxiliary products
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Use the following steps to help all choose.
Step 1:
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Perform a SWOT Analysis of individual strengths, weaknesses, opportunities, and
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dangers all would encounter if all followed each general strategy. After doing this, it
might be obvious that some of the generic strategies are unlikely to be successful for
individual company.
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Step 2:
To understand the nature of the industry all are in, perform a Five Forces Analysis.
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Step 3:
Compare the results of individual Five Forces analysis with the SWOT analyses
of the possible strategic options. Ask individualself how all could utilise each potential
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strategic move to:
◌◌ Limit or control supplier power.

◌◌ Control or lessen the buying/customer power.
◌◌ Survive the tough rivalry and win.
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◌◌ Lessen or do away with the risk of substitution.

◌◌ Lessen or eliminate the danger posed by fresh admission.
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Choose the generic approach that offers all the most robust collection of
alternatives.
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3.2.2 Red and Blue Ocean Strategies

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Source: https://www.launch-marketing.com/wp-content/uploads/2017/05/
GettyImages-908903466-768x543.jpg
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Red Ocean Strategies
A red ocean strategy involves competing in industries that are currently in
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existence. This often requires overcoming an intense level of competition and can often
involve the commoditization of the industry where companies are competing mainly on
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price. For this strategy, the key goals are to beat the competition and exploit existing
demand.
“The key goals of the red ocean strategy are to beat the competition and exploit
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existing demand.” The soft drink business is one that would benefit from a red ocean
approach. There are numerous entry-level obstacles in this long-established industry.
Industry titans like Coke and Pepsi are in rivalry for market share, but there are also
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numerous smaller businesses. There are numerous other factors that influence
new competitors, such as restricted vending and shelf space, well-established brand
recognition of popular, current companies, and many others. This makes it extremely
difficult to break into and be successful in the soft drink market.
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Figure: Red ocean strategy explained with lots of examples

Source: data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAARMAAAC3CA

What is the Red Ocean Strategy?

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Today’s businesses fight to survive in the face of intense industry competition. A
corporation must compete on an equal footing with another. Making money is the
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ultimate goal. The red ocean approach is one of the tactics employed by companies to
achieve a competitive edge. Competition is usually severe under a red ocean strategy,
as established enterprises compete to flourish in their respective industries.
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Red ocean companies include, for example, car companies. Every business
is competing to provide a solution to the same issue or provide for the same client
need. It would be riskier for a new company, especially a startup, to survive in a
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highly competitive environment. Indigo and SpiceJet, low-cost airlines in India that
have attracted consumers yet are always in conflict with one another, are examples
of businesses using the Red Ocean strategy. On a global or national level, it is the
principle of the strongest surviving.
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Benefits of Red Ocean Strategies
Less Risky
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The red ocean strategy’s first and most significant benefit is that there is very little
risk involved in implementing it. All don’t need to generate new demand for the goods
when all already have a market for it. As an alternative to the blue ocean strategy, which
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calls for the business to create demand or locate a new market for the goods, all might
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concentrate just on the pricing and customer service of individual rivals.
Future Clarity
When a corporation uses a red ocean strategy, it can better focus on its product
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and marketing strategy since it has clarity about the market, as well as the tastes and
preferences of its customers. It is similar to a black box as opposed to a blue ocean
strategy because all never know what the market or customers will think of the product.
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Requires Limited Resources

A company that employs the blue ocean strategy and has finite resources will
never be able to conduct business. There is a margin of safety with the red ocean
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method. After all, the business serves a market that has already developed. In other
words, small businesses should begin with a red ocean approach and switch to a blue
ocean strategy once they have established themselves and are willing to take more
chances.
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Blue Ocean Strategies

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Figure: Blue Ocean Strategy

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Source: https://coschedule.com/marketing-terms-definitions/blue-ocean-strategy

Instead than competing for market share with rival businesses, a blue ocean
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approach focuses on developing demand that doesn’t yet exist. All must keep in mind
that the market still has untapped potential at a deeper level. By extending the borders
of already established industries, red oceans are typically transformed into blue oceans.
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Finding the correct market opportunity and eliminating the competition are essential
components of a successful blue ocean strategy.
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“The key goals of the blue ocean strategy are finding the right marketing
opportunity and making the competition irrelevant.”
The iPod is a prime illustration of a blue ocean strategy that worked. Steve Jobs
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declared that Apple had “created a completely new category of digital music player
with [the] iPod, allowing all to put individual whole music library in individual pocket and
listen to it wherever all go.” This was in 2001 when the iPod was first released. Apple
introduced a product that started a brand-new industry by itself by looking beyond what
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was currently available on the market. Apple produced a successful product by going
above and beyond what customers requested.
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3 examples of Blue Ocean Strategy
We’ve explored the fundamentals of blue ocean strategy before. Now, to bring it to
life, we’re looking at 3 examples of companies that have used the blue ocean strategy
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framework to drive growth and innovation including the Nintendo Wii, Yellow Tail and
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Cirque de Soleil.
Nintendo Wii
The Nintendo Wii is the first instance of a blue ocean strategy from the leader
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in computer games, Nintendo. The idea of value innovation is at the core of the
Nintendo Wii, which was introduced in 2006. This is a fundamental tenet of the blue
ocean approach, which aims to concurrently pursue low cost and distinction. Nintendo
eliminated the hard disc and DVD features present in the majority of gaming consoles,
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as well as lowered the processing speed and visual quality, to cut expenses. In order
to set itself apart from other products on the market, Nintendo also unveiled a wireless
motion control stick at the same time. As a result, the company was able to introduce
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a number of novel features and advantages that were previously unheard of in the
gaming industry, such as the ability to utilise a gaming console to stay in shape or play
with more people.
By focusing on value innovation, Nintendo may go beyond competing in a

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crowded and extremely competitive red ocean against companies like PlayStation and
X-Box. Instead, it was successful in creating a completely new market. The Nintendo
Wii appealed to a completely new and large market - a blue ocean - covering non-
gamers, the elderly, and parents of allng children. Its creative, new features were priced
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affordably.
Yellow Tail
Another excellent example of the blue ocean concept in action is the creation of
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Yellow Tail, a new wine brand from Casella Wines. Yellow Tail became the fastest-
growing wine brand in US history three years after entering the market, providing

compelling evidence of the benefits that a blue ocean approach can provide. How
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did the company quickly reach this degree of success? Yellow Tail understood that
the majority of wine businesses compete fiercely for market share in a “red ocean”
environment. They realised they could create a “blue ocean” and reach a new
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market by minimising or eliminating the factors on which the business competed and
differentiating themselves.
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The usual emphasis on prominent vineyards and maturing was dropped by Yellow
Tail. Additionally, they did away with the complicated language that is typically featured
on wine bottles, which might be frightening to potential customers. Instead, Yellow Tail
developed a beverage that was sweet enough to appeal to the general public and so
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increase demand among beer and spirit consumers as well as wine connoisseurs. By
only introducing two varieties—one red and one white—they also made it simple to
acquire. As they say, the rest is history..
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Cirque de Soleil
Without include Cirque du Soleil, probably one of the most well-known instances
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of the blue ocean technique in operation, this list would be incomplete. The company,
which was founded in Canada in the early 1980s, has since provided entertainment
for 155 million people in more than 300 places. How? By pursuing both cheap cost
and differentiation, Cirque du Soleil redefined the circus sector. The elimination of
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live animal performances allowed the organisation to lower its cost structure, while
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the addition of live music, a theatrically inspired plot, and a focus on human physical
prowess let Cirque du Soleil create new aspects that had never been seen in the circus
world before.
The result? Cirque du Soleil created a new market space. Their new audience of
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adults and corporate clients (rather than the traditional audience of families) is also
willing to pay higher prices to watch this extraordinary spectacle.
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Red Ocean Strategy Blue Ocean Strategy

Compete in esixting market space Create uncontested market space
Beat the competition Make the competition irrelevent
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Exploit existing demand Create and capature new demnad

make the value-cost trade off Break the value cost trade off
Align the whole system of a firm’s activities Align the whole system of a firm’s actgivities
with its strategic choice of differentiation or in pursuit of differentiation and low cost
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low cost
Image: Comparison between red ocean strategy and blue ocean strategy
Source: https://www.researchgate.net/profile/Mohd-Ismail-58/
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publication/258499331/figure/fig1/AS:297548230217731@1447952434383/Red-
Ocean-versus-Blue-Ocean-Kim-and-Mauborgne-2010.png
3.2.3 Strategy Formulation at Functional Level

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Strategic management is significantly responsible for an organisation’s success.

Different strategic management levels have different functions. For the survival of
an organisation, top-down strategic planning was widely accepted in the 1970s. The
management’s next responsibility is to establish and put into practise strategies for
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each functional area after higher level plans have been developed. There are three
levels at which strategies are developed:
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◌◌ Corporate level
◌◌ Business unit level
◌◌ Functional level
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Every level of an organisation must have a plan in place to ensure its success,
but for planning to be most effective, every level’s plans must be in sync. Without
alignment, departmental tasks will conflict with one another’s goals and the business
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strategy as a whole will perform less well. No matter how well corporate level strategies
are developed and created, if they are not carried out to the required standard, all of the
effort will be for naught. The functional level has a major role in determining how well a
plan works. The functional level verifies that corporate and business level strategies are
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actually being implemented, and it achieves the desired outcome by making plans and
strategies a reality.
Individual organisation’s operational divisions and departments are at the functional
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level. The strategist is in charge of giving functional managers guidance on how
to carry out plans and strategies for effective implementation. For an organisation to
exist, functional strategy plays a critical role. The overall business plan is supported by
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functional strategy, and it also outlines how functional managers will proceed to meet
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the established goals and objectives. The functional capabilities of an organisation
are the foundation for departments like marketing, finance, production, and human
resources. There may be various sub-level domains that fall under functional strategies.
Planning functional strategies takes into account higher level strategies. Functional
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strategy is below business-level strategies in terms of the level of strategy formation.

Top-level management is responsible for conceptualising and creating the development
plan for functional strategies. A strategist manager develops useful, implementable
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strategies. Functional strategies assist the corporate level and overall business.
Specialists in each field develop practical strategies. It specifies the course of

action and establishes the benchmarks that must be met before achieving the company
strategy’s ultimate objective. The foundation of the organisation is made up of functional
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strategies. It offers the fundamental knowledge of resources and capacities upon which
higher level strategies are based. In order to create, manufacture, deliver, and support
the product or service of each company within the corporate portfolio, it is necessary to
coordinate the numerous tasks and processes. The plan created at a higher level is put
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into action by functional level strategy to promote an organisation.
Functional strategies are primarily concerned with:

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◌◌ Effectively using experts in the relevant functional area.

◌◌ Coordinating activities within the functional area (such as purchasing,
inventory control, and shipping in production/operations; or coordinating
advertising, promotion, and marketing research in marketing).
◌◌ Ensuring alignment between functional strategies, business-level strategies,
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and corporate-level strategy as a whole.

The time element has a significant impact on the effectiveness of functional

Notes
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strategy. For instance, 60 days before the first product ships, promotion for a new
product is introduced. Comparatively speaking, functional strategies are more transient
than corporate- or business-level strategies. Any organisation’s functional units are
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tasked with developing higher level strategies by contributing to the corporate level
and business unit level strategies. processing the information at hand and utilising it to
create higher level strategies. After developing the upper level strategies, the function
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unit begins creating action plans that may be carried out for each department.
The strategic planner is aware of the importance and relevance of planning at

various levels as well as how it aids an organisation in attaining its goals. Planning
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and strategies are used to direct companies toward accomplishing their objectives.
Providing data on client feedback or on the resources and capabilities that higher level
initiatives might be based on, for example. The functional units translate the higher
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level strategy or strategic intent into specific action plans that each department or
division must carry out in order for the strategy to be successful. A competent strategist
develops a plan employing all of the resources at their disposal and maximises the use
of those resources.
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Functional Level Strategy
This is the level at which an organisation operates. Employee decisions are
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frequently referred to as tactical decisions while discussing strategy at the functional
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level. They are interested in how an organisation’s many functions interact with the
other strategy levels. These tasks may involve marketing, finance, production, human
resources, and other things. Functional strategy handles a rather constrained plan. It
lists the goals for each unique function.
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Simply said, this is the plan that will guide employees’ daily work and eventually
keep individual company moving in the proper way. Probably the most crucial level of
strategy is the functional strategy level. This is because, without functional strategies,
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individual organisation can quickly lose traction and “get stuck” while competition moves
forward.
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At this bottom strategy level, let’s say all are a bigger organisation. Then, while
keeping in mind individual company strategy, all begin to consider how the various
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departments will support individual growth and how they will collaborate. Individual
marketing strategy, finances, information technology, operations, and other divisions all

have objectives and duties to fulfil. The likelihood of success will increase if there is a
Notes
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clear functional level strategy that links back to the overarching business strategy.
Functional level Business Strategy for a Smaller Organisation
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The existence of a functional level is essential for smaller organisations. All can
find individualself donning more than one “functional hat” if all’re one or two people.
Alternatively, even if the various functions aren’t properly specified, they are still
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present. Therefore, even if all don’t have a “marketing staff,” all still need to perform
marketing-related tasks. Even without a “financial team,” individual company still has
checks that need to be cashed and bills that need to be paid. Multiple plans can be
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created using Cascade’s software. To make sure that everything is moving in the right
direction, we have developed a strategic plan for each of the organisation’s functions
that relates back to our primary corporate strategy. “A journey of a thousand miles
begins with one step,” as the saying goes. Developing a functional-level strategy will
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ensure that individual organisation’s steps are the right ones. As we mentioned earlier,
the key takeaway here is that strategy is for everyone, no matter the stage of individual
business idea or organisation.
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3.2.4 Multi-Business Strategy
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What is a multi-strategy approach to investing?
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Most investing plans fall into one of two categories: passive or active, depending
on whether they involve mutual funds, exchange traded funds, or other sorts of assets.
Investing is difficult. Finding the holy grail is similar to trying to consistently make
a profit. When everything seems to be going well, the markets will suddenly lurch
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and distort into an impassable minefield. It’s crucial to uphold individual values while
still remaining flexible during individual trading adventure. This is the use of many
strategies.
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Principles vs Strategy
The multi-strategy approach to investing acknowledges the great potential of
individual strategies. However, the market is in a unique situation at every point in
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time, with unheard-of macroeconomic and microeconomic elements dictating price

changes, to which investors should adjust accordingly. Investors should establish a set
of principles that guide their investing decisions despite being at ease with evolving
strategies. This broad set of guiding ideas can cooperate with an iterative technique.
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So, what are the differences between principles and strategies?
Individual financial decisions should be primarily guided by individual core

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principles. They may be vague, high-level declarations regarding the perspective all
intend to adopt when developing individual portfolio. They can also be more detailed
guidelines that all want to follow while putting different strategies and asset allocations
into practise. Contrarily, strategies are the specific methods all employ to make market
investments. All may adhere to thoroughly researched and documented rules-only
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strategies, or all could more loosely follow a strategic approach.

Principles
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There are numerous types of principles. They might stem from research and study
related to investments as well as moral and religious convictions. For instance, the
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following guidelines can be used to evaluate investment choices:
◌◌ The key to making effective long-term investments is perseverance.

◌◌ Keep a more passive (rather than active) involvement in the markets
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whenever possible
◌◌ Stick to what all know
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◌◌ Never invest more than all can afford to lose
◌◌ Avoid investing in assets that significantly contradict individual moral beliefs
(e.g., companies that violate human rights, cause significant environmental
damage, harm people, etc.); (for example: technology stocks)
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As all can see, there are no hard-and-fast rules to setting principles. Some are
slightly vague and open to interpretation, whereas others represent stricter boundaries
all can place on individual activities. Before making an investment decision, all should
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reconsider individual investment principles.
Strategies
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Despite having a range of rules in place, individual ultimate goal is to maximise
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individual financial gains while maintaining a level of risk that all feel comfortable with.
As a result, it’s critical to be open to a variety of techniques that can change in response
to shifting markets, geopolitics, and individual own circumstances. When aiming for
individual desired risk-adjusted returns, for instance, value investing may not be the
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greatest strategy when markets are booming. On the other hand, steadfastly sticking
with a portfolio that is focused on long-term growth stocks throughout a recession is
unlikely to bring all the desired results.
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Since each one may be customised, the number of possible techniques is limitless
and they range from more generic to extremely particular strategies. Just a few
instances are shown below:
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◌◌ Growth investing and value investing

◌◌ Swing Investing
◌◌ Arbitrage Trading
◌◌ 130-30 Technique
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◌◌ SAR using a parabola

All will be more prepared to take on the markets if all are more knowledgeable
about the possible tactics.
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Finding a Balance
Using a multi-strategy approach requires balance in everything all do. A balance
between passive and active management. A balance between risk tolerance and risk
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aversion. A balance between holding and switching strategies.

The strategy all employ must, at its core, benefit all. However, by adhering to
Notes
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sound investment principles and keeping open to various approaches, all may ensure
that all have a variety of instruments at individual disposal for making money while also
working within a predetermined framework. This communication is provided solely for
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informational and educational purposes and should not be construed as investment
advice, a personal endorsement, an offer to buy or sell any financial instruments, or
a solicitation to do so. This information has not been prepared in accordance with
nl
the legal and regulatory requirements to encourage independent research and has
not taken into account the investment objectives or financial situation of any specific
recipient.
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Question:
1. What was the biggest opportunity?
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Case Study
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Amazon SWOT Analysis
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Amazon Detailed SWOT Analysis
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Strength
Brand Identity: Because online sales services are synonymous with Amazon,
Amazon focuses on enhancing customer satisfaction throughout the business process.
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Pioneer Advantage: Without a doubt, Amazon is the industry leader in online retail.
Cost Structure: Despite operating on razor-thin profits and effectively utilising its
cost advantage, Amazon is nevertheless profitable in trading.
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Business Development: Amazon continuously raises the quality of its services and
offers a wide range of them.
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Weakness
●● Low Profit Margins: To Maintain Its Cost-Leading Strategy, Amazon Has A Very
Thin Profit Margin. However, low profit margins leave businesses open to external
shocks, crises and other market changes.
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●● Seasonality: Amazon’s revenue and business scope vary seasonally, with sales
and revenue peaked in the fourth quarter of each year.

Opportunity
Notes
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●● Today’s Diversification Of E-Commerce Business
●● Continues To Increase Awareness Of Its Own Branded Products And Services.
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●● Amazon Develops More Local Websites To Participate In The International Market.
With The International Expansion Of Amazon, Some Local Businesses Have The
Opportunity To Enter The International Market.
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●● Promoting The Strategic Cooperation Between Amazon E-Commerce And Its
Related Affiliated Industries Will Drive Positive Development Of The Industry
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Threat
●● Loss Of Profits Due To Low-Profit Margins
●● Patent Infringement and Other Aspects Of Amazon’s Litigation
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●● E-Commerce Industry Barriers To Entry Barriers
●● Cybersecurity Issues
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Question:
1. What do all need to do next after all understand strengths and weaknesses and
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identify opportunities and threats?
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Case Study - 2
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Starbucks SWOT Analysis
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1. Strengths – The Starbucks Group has strong profitability, with 2004 revenue
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exceeding $600 million.
2. Weaknesses – Starbucks is known for its continuous improvement and innovation.
(Translator’s Note: It can be understood as the instability of the product line)
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3. Opportunity – The launch of new products and services, such as the sale of coffee
at the show.
4. Threats – rising costs of coffee and dairy products.
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Starbucks Detailed SWOT Analysis
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Strengths
●● Starbucks Corporation Is A Very Profitable Organisation, Earning More Than $600
Million In 2004. The Company Generated Revenue Of More Than $5000 Million In
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The Same Year.

●● It Is A Global Coffee Brand Built A Reputation For Fine Products And Services. It
Notes
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Has Almost 9000 Cafe Shop In Almost 40 Countries.
●● Starbucks Was One Of The Fortune Top 100 Companies To Work For In 2005.
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The Company Is A Respected Employer That Values Its Workforce.
●● The Organisation Has Strong Ethical Values And An Ethical Mission Statement As
Follows, ‘Starbucks Is Committed To A Role Of Environmental Leadership In All
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Facets Of Our Business.’
Weaknesses
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●● Why Starbucks Is Known For Developing New Products And Being Creative.
●● They may be exposed to the possibility that their innovation would deteriorate over
time, though.
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●● With more than three-quarters of its cafe shop located in the domestic market, the
organisation has a significant presence in the United States of America. Some
people believe that in order to spread business risks, they need to invest in other
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nations (national portfolios).
●● The organisation depends on selling coffee in retail, which is a key competitive
advantage. If the need arises, this can make them hesitant to diversify into other
industries. r
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Opportunities
●● Starbucks Is Very Good At Taking Advantage Of Opportunities. E.G. In 2004 The
Company Created A CD-Burning Service In Their Santa Monica (California USA)
Cafe With Hewlett Packard, Where Customers Created Their Music CD.
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●● New Products and Services That Can Be Retailed In Their Cafe Shop, Such As
Low Price Products.
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●● The Company Has The Opportunity To Expand Its Global Operations. New
Markets For Coffee Such As India And The Pacific Rim Nations Are Beginning To
Emerge.
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●● Co-Branding With Other Manufacturers Of Food And Drink And Brand Franchising
To Manufacturers Of Other Goods And Services Both Have Potential.
Threats
●● Who Knows If The Market For Coffee Will Grow And Stay In Favor With
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Customers, Or Whether Another Type Of Beverage Or Leisure Activity Will

Replace Coffee In The Future?
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●● Starbucks Is Exposed To Rises in the Cost of Coffee and Dairy Products.

●● Since Its Conception In Pike Place Market, Seattle In 1971, Starbucks’ Success
Has To Lead To The Market Entry Of Many Competitors And Copycat Brands That
Pose Potential Threats.
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Summary
●● This process enables organizations to think and act strategically. It takes the

mystery out of strategy and enables organizations to put into practice the theories
Notes
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that are supported by well-respected strategists, consultants and academics.
●● As an example, it can be shown how this process is often used to address the
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important elements of strategy formulation as they are defined by one of today’s
leading strategists—Michael Porter.
●● In his article titled ‘‘What Is Strategy?’’ (1996), Michael Porter describes what an
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effective strategy must deliver.
●● He states that ‘‘an effective strategy must enable an organization to: 1. Uncover
a unique and valued position that involves a set of activities that are different
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than those taken by competitors. 2. Make all the required trade-offs, vis-a`-vis
competitors, to determine what activities should be pursued and what actions should
be taken. 3. Ensure the activities that are taken to execute the strategy fit together
to create a distinctive and sustainable competitive advantage for the organization.’’
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Glossary
●● Accelerated Growth: The enhanced, systematic evolution of a specific process,
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product, service, technology or organization.
●● Assigned Values: The numerical values, assigned to the weighting of a customer
group, that weight the importance of that customer group relative to other
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customer groups in the customer set. The assigned values are based on best
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practices as determined through project experience.
●● Baseline Concept: The concept against which all other concepts are compared
when conducting concept evaluation and testing.
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●● Basic Desired Outcome: A desired outcome that has been so well satisfied or
evolved by previous solutions that customers expect the same level of satisfaction
from any future solution.
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●● Benchmark: The process of comparing different products, technologies or

organizations against a set of metrics to determine the relative competitive
position of each. This is accomplished in this process by determining how well the
competing items perform against a set of appropriate predictive metrics.
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●● Breakthrough Solution: A solution or strategy that satisfies over 50% of the

customers’ desired outcomes better than an existing strategy or solution.
Breakthrough solutions often deliver up to 10 times more value than commonly
implemented solutions and enable an organization to leapfrog their competition.
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Breakthrough solutions also of ten provide an organization with a unique and

valued competitive position.
●● CD-MAP: The Customer-Driven Mission Achievement Process (CD-MAP) is
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a process that enhances the ability of an individual or organization to formulate

strategies, develop plans and make complex decisions. This process enables
organizations to accelerate the evolution of their products, services, processes
and strategies.
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●● CD-MAP Facilitator: An individual trained in the execution of the CD-MAP process

who works with a team within an organization to ensure the integrity of the
process.

●● Concept: An idea, strategy or potential solution in its conceptual or theoretical

Notes
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stage.
●● Concept Evaluation or Testing: A method used to evaluate a concept’s potential to
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deliver value to customers in a specified target segment.
●● Concept Features/Elements: The components or attributes of a concept that
individually deliver unique value. Features are mutually exclusive components of a
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concept.
●● Concept Optimization: A method used to systematically create the solution that will
deliver the most value to customers in a specified target segment.
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●● Concept Score: A numerical value that quantifies the percent of desired outcomes
that are better satisfied by the concept under evaluation than the concept it is
being evaluated against.
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●● Constants: Elements of the Universal Strategy Formulation Model (USFM) that are
stable within the time period in which the mission must be achieved. The elements
include customer desired outcomes, constraints and the desired competitive
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position.
●● Constraint: A boundary condition placed on the potential solution or strategy,
which restricts freedom of choice. Constraints are typically imposed by an
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individual, the organization or by a third party. A constraint must be satisfied by the
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chosen solution.
●● Customer: An individual or group of individuals involved in, or affected by, the
strategy, plan or decision that is being contemplated. As an example, if an
organization wants to improve the process of surgery, the customers may include
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surgeons, support staff, hospital administrators, the manufacturer of the product

and the individuals within the organization who are providing the solution.
●● Customer Set: All of the customer types that are involved in, or affected by, the
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decision, plan or strategy that is being contemplated. As an example, an end-

user, decision maker and distributor are customer types who combine to form a
customer set.
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●● Customer Weighting: The numerical value assigned to a customer type that

defines their importance as a customer relative to other customer types in the
customer set. Desired
●● Competitive Position: A unique and valued position that an organization desires to
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achieve relative to its competitors. To achieve the desired competitive position, the
chosen solution must satisfy the most important desired outcomes better than any
solution employed or planned by a competitor. The desired competitive position is
established through target values that are defined for the most important predictive
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metrics.
●● Desired Outcome: A desired outcome is a statement, made by an individual
involved in or affected by a strategy, plan or decision that describes an important
benefit they would like to receive from the strategy, plan or decision that is being
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contemplated. Desired outcomes are unique in that they are free from solutions,
specifications and technologies, free from vague words such as ‘‘easy’’ or
‘‘reliable’’ and are statements that are stable over time.

●● Desired Outcome Gathering Session: Qualitative research conducted with

Notes
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individuals who are involved in diverse aspects of a specific process, product,
service or organigation. A session typically involves 10 participants and a desired
outcome gathering expert. The participants are pre-screened to meet the specified
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target segment criteria.
●● Direction of Improvement: The direction in which a predictive metric is to be
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evolved or improved.
●● Executable Plan of Action: A series of actions carried out by individuals that satisfy
a set of desired outcomes or execute a process. In an organization, this type of
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solution requires interaction between individuals.
●● External Customer: The individual or group of individuals external to the company
who will receive value from the evolution of the process or the achievement of
desired outcomes.
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●● Feasibility Factors: Factors that must be considered to evaluate the feasibility of a
specific concept. Feasibility factors usually include cost, risk and effort.
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●● Feature: The components or attributes of a concept that individually deliver unique
value. Features are mutually exclusive components of a concept.
●● Implementation: The execution of a plan or strategy.
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Importance: The numerical value an individual places on a desired outcome that
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reflects the individual’s desire to achieve that outcome.
●● Importance and Satisfaction Data: Quantified importance and satisfaction data
that are obtained through statistically valid research. The data represent the
importance and satisfaction that an individual places on a specified set of desired
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outcomes.
●● Internal Customer: An individual or organization engaged in the business of
evolving a process or enabling the achievement of a set of desired outcomes.
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●● Lateral Thinking: A method of thinking in which an individual searches across

multiple disciplines, industries or cultures in an attempt to uncover the optimal
solution.
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●● Matrix Analysis: A tool that assists in identifying the relationships that exist
between two sets of data. In the CD-MAP process, matrix analysis is used to
identify the relationship between predictive metrics and desired outcomes. It is
also used, in conjunction with the normalized importance algorithm, to prioritize the
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predictive metrics based on their predictive value.

●● Mission: A specific task or project with which an individual or organization is
charged. A mission may be large or small in scope. When defining a mission,
)A
extending the focus of the mission past the existing boundaries of a stated process
will often create new opportunity.
●● Normalized Importance: An algorithm that prioritizes the predictive metrics in
the order of their predictive value. A high priority predictive metric will predict the
(c
satisfaction of several important desired outcomes.

●● Opportunity: Desired outcomes that an individual, segment or total population
perceive to be both important and unsatisfied.
●● Optimal Solution: The one solution or strategy that will satisfy the largest number
Notes
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of important desired outcomes given the internal and external constraints imposed
on the solution and the competitive position that is desired. The optimal solution
will also be the solution that delivers the most value for the least cost, risk and
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effort. The optimal solution is typically a breakthrough solution.
●● Outcome-Based Logic: The logic that is used in the CD-MAP process to execute
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the USFM. Outcome-Based Logic is characterized as follows. First, all of the
criteria to be used to evaluate any potential solution are defined and prioritized.
Second, that criteria is used to drive the actual creation of a variety of potential
solutions and evaluate the potential of each solution. Third, the results of
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the evaluation are used to assist in improving each solution by replacing its
weaknesses with valued attributes from other solutions. After several iterations of
improvement, the optimal solution is determined and selected.
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●● Outcome-Based Segmentation: Quantitative market research that uses desired
outcomes as the basis for segmentation. Cluster analysis is executed to create the
segments. The segments are then profiled to determine their composition.
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●● Outcome Prioritization Method: The numerical value or calculation that is used
to prioritise the desired outcomes. The desired outcomes are typically prioritized
by: their corresponding importance values; their corresponding importance
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and satisfaction values in a calculation that identifies opportunity; or their
corresponding satisfaction values only.
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●● Positioning: The process of comparing different products, technologies or
organizations to determine the current competitive position of each and to
establish a desired strategic position for the future.
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●● Predictive Logic: Predictive logic is characterized by thinking about what can be

done now to ensure or predict that a desired outcome will be better satisfied in the
future.
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●● Predictive Metric: A parameter that can be measured today to ensure its

corresponding desired outcome will be achieved in the future. A predictive metric is
measured and controlled in the design of the solution and predicts the solution will
satisfy one or more desired outcomes. In the CD-MAP process, a single, strong
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predictive metric is defined for each desired outcome. A predictive metric may also
be referred to as a predictive success factor.
●● Predictive Value: A numerical value that reflects the degree to which a predictive
metric predicts the satisfaction of a specific desired outcome. Predictive values
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typically reflect a non-predictive, weak, moderate or strong predictive relationship

with a desired outcome.
●● Process: A series of activities, actions or events that produce a desired result.
)A
Examples of processes include conducting surgery, manufacturing a product,

making an acquisition, developing a product and formulating a strategy.
●● Process Evolution: Improving the degree to which the desired outcomes of a
process, product, service or organization are satisfied. The evolution can be
(c
measured using the target values assigned to the predictive metrics.

●● Product: A device that is used by an individual or organization to assist in the

Notes
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execution of a process or to achieve a set of desired outcomes. User interaction
with the device is characteristic of a product.
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●● Qualitative Research: Market research that is conducted to uncover desired
outcomes on the subject of interest. It is typically conducted as a group interview
or personal interview. Qualitative research is conducted as part of the CD-MAP
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process to uncover desired outcomes.
●● Quantitative Research: Market research that is conducted to quantify the
importance and perceived satisfaction level of each desired outcome.
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●● Sample: A grid that defines the types and number of individuals who will be
interviewed as part of quantitative market research. The sample is designed to
represent all target segments within the population.
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●● Satisfaction: The numerical value an individual places on a desired outcome that
reflects the individual’s perception of how well the desired outcome is currently
satisfied.
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●● Scenario: A situation that may currently exist, or potentially exist, that requires
consideration.
●● Screening Criteria: Criteria used to ensure the customers interviewed for
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qualitative and quantitative research are representative of the target population.
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●● Segment: A group of individuals who are considered a potential target market.
A segment may include an industry, a business size, other convenient statistical
classifications or clusters derived through segmentation analysis.
●● Segmentation: A method of finding individuals in a population who value the same
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desired outcomes. This is accomplished using a statistical technique called cluster

analysis. When executing the CD-MAP process, desired outcomes are used as
the basis for segmentation.
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●● Service: A means by which desired outcomes are satisfied for an individual or

organisation by a third party. External customer interaction is common with the
service provider, as the provider executes the process of interest for the individual
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or organisation.
●● Solution: A specific set of features that form the basis of a plan or strategy, and
define how the desired outcomes will be achieved. A proposed solution is often
referred to as a plan or a strategy. Solutions are treated as variables in the USFM.
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●● Solution-Based Logic: The logic pattern that is commonly used to formulate

strategies. Solution-Based Logic is characterized as follows. First, individual’s use
various methods to think of several different solutions. The methods may include
)A
brainstorming, research or other methods. Second, individuals evaluate each

of the proposed solutions to determine the best solution. The methods used to
accomplish this task may include concept testing, conjoint analysis, quantitative
research or other methods. Third, the best solution is selected based on the
results of the previous steps.
(c

●● Stakeholder: An individual or group of individuals who are responsible for the

Notes
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creation of a product service or strategy, or who must interact with those involved
in a specific process.
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●● Strategy: A strategy is a plan. It is an executable plan of action that describes how
an individual or organization will achieve a stated mission.
●● Strategy Formulation: The process of creating a strategy.
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●● Strategyn: An organization whose mission is to provide individuals and businesses
with tools that evolve their ability to formulate strategies, define plans, make
complex decisions and achieve their valued missions.
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●● Synergy Analysis: A method for determining the relationships that exist between
each desired outcome and each predictive metric. The relationships are
uncovered using matrix analysis. Once the relationships have been established,
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the predictive metrics that have the most synergy can be determined.
●● Target Segment: The individual or group of individuals who the internal customers
have chosen to serve.
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●● Target Values: Values assigned to predictive metrics to guide the level of
satisfaction that must be achieved by any proposed solution. Target values are
set to ensure the final solution will enable an organization to occupy its desired
competitive position. r
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●● The Total Quality Group: A consulting firm that specializes in the development and
facilitation of the CD-MAP.

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1. An in-depth investigation of a company’s market presence based on both internal

and external factors is known as a scenario ____________
a. Planning
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b. Organising
c. analysis.
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d. evaluating
2. A regular situation analysis provides the information a company needs to create a
course of action to achieve its_________.
a. Goals
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b. Actions
c. Plans
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d. Programmes
3. A critical _____of a situation analysis is analysing present products and services as
well as upcoming product launches.
a. Section
(c
b. Division

c. Part
Notes
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d. area
4. The market _______identifies the target market and the level of interest in a
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company’s goods or services.
a. Directing
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b. Study
c. Planning
d. Organising
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5. Market opportunities are represented by unmet or underserved___________.
a. Needs
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b. Social needs
c. Factors
d. pros
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6. The competitive advantages, successful ________systems and processes, as well
as resources like technology, patents, knowledge, and cash, should all be listed
under the strengths category.
a. External
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b. Mixed
c. Internal
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7. ___________include internal elements that prevent individual company from being

more competitive, such finance shortages or staffing shortfalls.
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a. Strength
b. Weaknesses
c. Opportunity
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d. threats
8. Opportunities are outside forces that can _________individual business, such as
legislative changes, impending media attention, and exceptional occasions.
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a. Benefit
b. Result
c. Generate
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d. impact
9. Threats are outside forces over which individual business has no ____________.
a. control.
(c
b. Affect

c. Outcome
Notes
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d. tact
10. A corporation can gain insight into the dependability of these partnerships by
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reviewing contracts and ______________whether goods and services have
historically been supplied as promised.
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a. Evaluating
b. Examining
c. Analysing
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d. assessing
11. A situational analysis should look at both the internal and external factors affecting
a company’s ________.
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a. success
b. Result
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c. Outcome
d. plan
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12. The___ C approach may be the simplest way to conduct a situational analysis that
takes into account both internal and external elements that have an impact on a
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firm.
a. 2
b. 3
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c. 4
d. 5
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13. The SWOT analysis enables all to __________individual competitive advantages,

areas for business expansion, and weak points
a. Identify
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b. Act
c. Access
d. find
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14. A strategic management performance indicator known as the balanced scorecard

(BSC) is used to identify and enhance various internal business activities and the
results they have on the ________world.
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a. Inside
b. Outside
c. Whole
d. narrow
(c

15. Kaplan and Norton provided instructions on how to create a balanced scorecard in
their _____publication. Notes
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a. 1991
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b. 1992
c. 1993
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d. 1995
16. The BSC, often known as the Balanced Scorecard, is a framework for managing
and implementing _________.
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a. strategy.
b. Action
c. Result
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d. output
17. The Greek term “stratçgos”—from stratus, which means_______, and “ago,” which
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means leading or moving—is the source of the English word “strategy.”
a. Nation
b. Army
c. Ploy
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d. perspective
18. Porter identified _____general approaches that can be used to both categorise and
influence corporate behaviour.
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a. One
b. Two
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c. Four
d. six
19. The Differentiation Strategy is where a business focuses on differentiating its
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products or services from ___________.

a. competitors.
b. Consequences
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c. Output
d. direction
20. Individual financial decisions should be primarily guided by individual core
)A
____________.
a. Rules
b. Guidelines
(c
c. ethics
d. principles.

Exercise
Notes
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1. Elaborate balance score card with the help of an example.
2. What are the steps of formulating corporate strategies?
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3. Discuss in brief porter’s competitive strategies.
4. Differentiate between Red Ocean and Blue Ocean strategies.
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5. Explain multi-business strategy.
Learning Activities
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1. Draw a table of integration of functional strategy.
2. Draw a flow chart of strategy formulation.
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1. c 2. a
3. c 4. b
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5. a 6. c
7. b 8. a
9. a r
10. b
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11. a 12. d
13. a 14. b
15. c 16. a
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17. b 18. c
19. a 20. d
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Further Readings and Bibliography References

1. Abraham, S. 2006, Blue oceans, temporary monopolies, and lessons from
practice.
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2. Andersen, P.H. Strandskov, J. 2008, The innovator’s dilemma: when new

technologies cause great firms to fail/leading the revolution/blue ocean
strategy: how to create uncontested market space and make the competition
irrelevant.
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3. Ansoff, H. I. 1984, Implanting Strategic Management. Englewood Cliffs, NJ:

Prentice Hall.
4. Arbnor, A and Bjerke, B 1996, Methodology for creating business knowledge,
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2nd ed, SAGE Publications, USA. Azar, O.H. 2008, Book review: blue ocean
strategy: how to create uncontested market space and make the competition
irrelevant.
5. Bauer, H.H. 1992, Scientific literacy and the myth of the scientific method.
(c
Urbana: University of Illinois Press Chandler, A. D. 1962, Strategy and

Structure.
6. Cambridge, MA: MIT Press. Collins, J. 1994, Build to Last.
7. Colman, R. Buckley, P. 2005, Blue ocean strategy.

Notes
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8. Côté , M. 2005, Sailing the oceans blue.
9. CA Magazine . 138. 72-73.
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10. De Groot. 1961, Methodology Drucker, P. 1954,The Practice of Management.
New York: Harper and Row. Eisenhardt, K. 1989, Building theories from case
study research.
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11. Gordon, R. M. 2005, Blue ocean strategy: how to create uncontested market
space and make the competition irrelevant
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12. Gorrell, C. 2005, Quick takes. Strategy and Leadership. 33. 64-70.
13. Hamel, G. Prahalad, C.K. 1990, The core competence of the corporation.
14. Harvard Business Review. May-June.
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15. Hamel, G. 2007, The Future of Management. Boston, MA: Harvard Business
School Press.
16. Kim and Mauborgne Blue Ocean Strategy official website Mario Ferriera, 2009,
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17. Globalization, Entrepreneurship and Small Business Strategize blue, 2010,
Make competition irrelevant
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18. Kim and Mauborgne, 2005, Blue ocean strategy book, How to Create
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Uncontested Market Space and Make the Competition Irrelevant
19. Wang Zhao, Yang Jinwe. Application of Blue Ocean Strategy to Chinese 3G
Mobile Telecom Industry
20. A Conversation with W. Chan Kim and Renee Mauborgne, authors of BLUE
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OCEAN STRATEGY
21. Blue ocean strategy with W. Chan Kim and Renee Mauborgne, Harvard
Business Review, October 2004
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22. Gabor George Burt, 2010, Creating Blue Oceans Blue Ocean Strategy
creation, news, examples, insights.
23. Michel Badoc, Marc Beauvois Coladon, November 2008, Stratégies de l’océan
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bleu permettront selles de retrouver les voies de la croissance?

24. Kimmo Suominen. 2009. Consuming strategy: the art and practice of
managers’ everyday strategy usage.
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25. Vadim Kotelnikov, 2001, Strategic Leadership Providing the Vision, Direction,
the Purpose for Growth, and Context for the Corporate Success
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(c

Module - IV: Strategic Implementation and Control

Notes
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●● Importance of Implementation Process in Strategic Planning
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●● Objectives Setting
●● Task Setting
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●● Resource Allocation
●● Importance of Control in Strategic Planning
●● Control as per Organisational Structure
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●● Role of Leadership and Culture
●● Strategic Control, Types, Importance and Factors affecting it
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Introduction
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Figure: Strategic implementation model

Source : https://businessjargons.com/wp-content/uploads/2018/09/strategy-
implementation-model.jpg
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Definition:
The execution of plans and strategies in order to achieve the organisation’s long-
)A
term goals is referred to as strategy implementation. It transforms the chosen strategy

into the organisational moves and actions to accomplish the goals. Simply put, strategy
implementation is the technique through which the firm develops, utilises and integrates
its structure, culture, resources, people and control system to follow the strategies to
have the edge over other competitors in the market.
(c

Strategy Implementation is the fourth stage of the Strategic Management process,

Notes
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the other three being a determination of strategic mission, vision and objectives,
environmental and organisational analysis, and formulating the strategy. It is followed
by Strategic Evaluation and Control.
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4.1 Implementation
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Process of Strategy Implementation
1. Establishing an organisation with the capacity to successfully implement the
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strategy.
2. Allocating adequate resources to activities that are crucial to the strategy.
3. Making policies that support strategy.
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4. These policies and initiatives are used, which promotes ongoing development.
5. Combining the framework of rewards for reaching the outcomes.
6. Employing tactical leadership.
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The success of the company is significantly influenced by the strategy
implementation process. After doing a SWOT analysis, identifying the strategic issues,
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and scanning the environment, the process is carried out.
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Prerequisites of Strategy Implementation
●● Institutionalization of Strategy: First and foremost, the strategy needs to be
institutionalised, meaning that whoever came up with it needs to defend or support
it in front of the other members lest it be undermined.
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●● Creating an effective organisational climate: This refers to the elements of

the internal environment that help the organisation achieve its goals, such as
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cooperation, employee development, levels of dedication and determination,

efficiency, etc.
●● Creation of operating plans: Operating plans are the programmes, choices, and
actions that are consistently carried out in various departments of the firm. By
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focusing on the important variables, they help the organisation achieve its goals if
they are written to show the suggested strategic results.
●● Creating a sound organisational structure: Organisation structure refers to
the connections between the various components of an organisation. It draws
m
attention to the connections between various titles, functions, and positions. The
structure must be created in accordance with the strategy’s specifications in order
to be put into action.
)A
●● Periodic Review of Strategy: The strategy should be reviewed on a regular basis

to determine whether it is still relevant to the organisation’s mission. A review is
necessary to determine whether the organisation can meet its needs because it
operates in a dynamic environment that could alter at any time.
(c
Even the best-laid plans fall short if they are not put into practise properly.
Additionally, it should be remembered that only effective execution is possible if

the strategy is in line with other aspects such as resource allocation, organisational
Notes
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structure, work climate, culture, process, and reward structure.
Aspects of Strategy Implementation
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●● Creating budgets that allocate enough resources to tasks important to the strategic
success of the company.
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●● Providing the company with knowledgeable and experienced personnel.
●● Ensuring that the organisation’s policies and procedures support the effective
implementation of the strategy.
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●● Key business functions should be carried out using leading practises.
●● Establishing an information and communication system helps the organisation’s
workers do their jobs well.
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●● Creating a positive work environment and culture to ensure that the strategy is
implemented effectively.
The time-consuming phase of the process is putting the strategy into action and
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achieving the intended objectives
4.1.1 Importance of Implementation Process in Strategic Planning

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What is Strategic Implementation?
Using a strategy helps improve the effectiveness and efficiency of the process
when teams have goals they wish to attain. Strategy implementation entails developing
a plan and carrying it out inside the organisation or team. Understanding this procedure
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better will enable individual to properly carry out an organisation’s plans.
The act of carrying out a plan to achieve the desired goal or collection of goals is
known as strategy implementation. The process of brainstorming aids in the formulation
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of these concepts, while the process of implementation enacts the resulting strategies
or plans. Feedback and status updates are crucial to the implementation of a plan
since they help determine whether it is effective and identify any areas that could want
improvement. The process of putting strategies and plans into practise in order to
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achieve strategic objectives and goals is known as implementation. As critical as, if not
more so than, individual strategy is the execution of individual strategic plan. A business
can follow a clear strategic path, achieve a set of performance goals, provide value to
customers, and be successful with the help of a strategic plan. But this is only a plan;
m
it doesn’t ensure that the desired outcome is achieved any more than having a map
ensures a person reaches the intended location.
)A
(c

Notes
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in
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ty
r si
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ni
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Figure: Six steps of Strategic Implementation

Source: https://asana.com/resources/strategy-implementationGetting Individual
Strategy Ready for Implementation
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Wasteing time and effort on the planning process and then failing to implement
the plan is particularly frustrating for firms that already have a strategy in place.
Even though it may not be the most fascinating subject to discuss, implementation
)A
is a fundamental business practise that is essential for any strategy to succeed.

Implementation concerns who, where, when, and how; the strategic plan addresses
what and why of actions. Both components are necessary for success that much is
true. In fact, if implemented properly, businesses can gain a competitive advantage.
Individual’ll learn how to obtain support for individual whole implementation strategy in
(c
the parts that follow, as well as how to steer clear of certain frequent pitfalls.

Avoiding the Implementation Pitfalls

Notes
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Because individual want individual plan to succeed, heed the advice here and stay
away from the pitfalls of implementing individual strategic plan.
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Here are the most common reasons strategic plans fail:
◌◌ Lack of ownership is the most frequent cause of plan failure. If no one has a
nl
stake in or responsibility for the plan, everyone will go about their daily lives
with the exception of a few irate people.
◌◌ Poor communication: Employees aren’t informed about the plan and aren’t
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aware of their contributions.
◌◌ Getting bogged down in the details: Owners and managers lose sight of long-
term objectives when preoccupied with day-to-day operational issues.
◌◌ Unusual: The plan is considered as though it were unrelated to and outside of
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the management process.
◌◌ An overwhelming plan: The team failed to make difficult decisions to eliminate
non-critical tasks, which resulted in the goals and actions established during
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the strategic planning session being too numerous. The employees are
unsure on where to start.
◌◌ A strategy with no purpose: The vision, mission, and value statements
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are dismissed as empty platitudes that are not backed up by deeds or lack
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employee support.
◌◌ Annual strategy: Only at the yearly weekend retreats is strategy discussed.
◌◌ Ignoring implementation: The process of strategic planning does not address
implementation. It is believed that the planning document is a goal in itself.
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◌◌ There is no way to track progress, and the strategy only measures what is
simple, not what is crucial. Nobody detects any forward motion.
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◌◌ Lack of responsibility: Transparency and accountability promote

transformation. This implies that there must be a designated owner for each
measure, objective, data source, and initiative.
◌◌ Lack of empowerment: Although accountability may provide strong motivation
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for improving performance, employees must also have the authority,

responsibility, and tools necessary to impact relevant measures. Otherwise,
they may resist involvement and ownership.
It’s easier to avoid pitfalls when they’re clearly identified. Now that individual know
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what they are, individual’re more likely to jump right over them!
Covering all individual Bases

)A
As a business owner, executive, or department manager, individual job entails

making sure individual’re set up for a successful implementation. Before individual start
this process, evaluate individual strategic plan and how individual may implement it by
answering a few questions to keep individualself in check.
Take a moment to honestly answer the following questions:

(c
◌◌ How dedicated are individual to carrying out the strategy that will advance
individual business?
◌◌ How will the plan be distributed throughout the organisation?

Notes
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◌◌ Are there sufficient people who have a buy-in to drive the plan forward?
◌◌ How will individual inspire individual workforce?
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◌◌ Have individual determined which internal procedures are essential for moving
the plan forward?
◌◌ Will individual invest time, money, and resources to support the plan?
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◌◌ What are the challenges to carrying out and promoting the plan?
◌◌ How will individual utilise the resources at individual disposal to their fullest
potential?
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Making Sure individual have the Support
The five crucial elements that must be present for implementation to succeed are
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people, resources, structure, systems, and culture. To go from designing the plan to
activating the plan, every component needs to be in place.
People
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The first step in putting individual plan into action is to confirm that the appropriate
individuals are on board. The right people are those who possess the necessary
knowledge and abilities to support the plan. Expand staff skill sets in the months
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following the planning process through hiring, recruiting, or training to integrate new
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capabilities required by the strategic plan.
Resources
To support implementation, individual must have enough money and time. True
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costs are frequently understated or overlooked. A realistic time commitment from

personnel to reach a target, a detailed breakdown of costs related to a method, or
unanticipated cost overruns by a vendor are all examples of true costs. Employees
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must also have enough time to implement any potential additional activities that they
aren’t already carrying out.
Structure
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Establish individual management structure, delineate the proper lines of authority,

and keep lines of communication with individual staff open and transparent. The two
simplest strategies to set up a structure are to designate a plan owner and have regular
strategy sessions. Depending on the amount of activity and the time range of the plan,
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monthly or quarterly meetings to discuss the progress should be organised.
Systems
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Technology and management systems work together to monitor the plan’s

development and speed up plan adaptation. Include in the system milestones that must
be attained in a predetermined amount of time. One tool that many organisations use to
track progress and set milestones is a scorecard.
(c
Culture
Establish a setting where employees can feel at ease and connected to the
organisation’s objective. Reward success to emphasise how crucial it is to concentrate
on strategy and vision. Create some original good and negative outcomes for
Notes
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implementing the approach successfully or unsuccessfully. The benefits can be
significant or insignificant as long as they elevate the approach above the routine and
encourage individuals to prioritise it.
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Determine individual Plan of Attack
Implementing individual plan includes several different pieces and can sometimes
nl
feel like it needs another plan of its own. But individual don’t need to go to that extent.
Use the steps below as individual base implementation plan. Modify it to make it
individual own timeline and fit individual organisation’s culture and structure.
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◌◌ Once individual have heard from everyone who is involved, put individual
strategic strategy into practise.
◌◌ Based on individual financial assessment, align individual budget with
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individual annual goals.
◌◌ Create different iterations of individual idea for every group.
◌◌ Create a scorecard system to track and keep an eye on individual plan.
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◌◌ Set up individual system for performance management and rewards.
◌◌ Introduce individual plan to the entire company.
◌◌ r
Center the corporate strategy on the departmental annual plans.
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◌◌ Schedule monthly strategy meetings with predetermined reporting to track
individual advancement.
◌◌ A large group meeting and fresh assessments for the yearly plan review
should be scheduled as part of the annual strategic review.
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Implementation
The process of putting strategies and plans into practise in order to realise
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strategic objectives and goals is known as implementation. Organisations that create

strategic plans must have a procedure for putting the plan into action because
implementation is a crucial step in the process. Depending on the organisation, a
different implementation process may be used. A strategy will typically be developed
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at a high level, particularly if it adheres to a shared strategy of value discipline, and it

can only be put into action successfully if it can be stated in more specific policies and
messages that are sent to the entire organisation’s workforce. Only with the backing of
the people who deal with the customers, suppliers, and organisational resources that
the plan is based on can a strategic change be successful targeted at. As a result, it
m
aids in ensuring that the plan is workable and tackles any potential realistic concerns
when it is presented at a lower organisational level. To be successful, a plan must be
applied specifically in the marketing, RandD, procurement, HR, manufacturing, and IT
)A
divisions. The new strategy’s implementation must take into account any resources,
skills, and organisational changes that are needed to support it. To ensure that the
strategy is being implemented correctly and effectively, it must also be monitored
and amended during the implementation process. To monitor the key elements of the
plan, this requires control systems, assessment and feedback methods, and feedback
(c
mechanisms.

The support of senior management is crucial for a strategy’s implementation.

Notes
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According to research, top management’s support is unquestionably necessary
for strategy implementation. They must therefore demonstrate their willingness to
commit time, effort, and faithfulness to the implementation process. Senior executives
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need to let go of the idea that lower level managers share their perspectives on the
strategy and its execution, as well as its underlying logic and urgency (Dahlgaard, and
Martensen, 1998). Involving the invaluable experience of middle managers is another
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part of implementing a strategic strategy. Any implementation effort’s degree of middle
managers’ involvement determines its success.To generate the required acceptance
for the implementation as a whole, the affected middle managers’ knowledge, which is
O
often underestimated, must already be accounted for in the formulation of the strategy.
After that, it is to make sure that these managers are a part of the strategy process,
their motivation towards the project will increase and they will see themselves as an
important part in the process
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In the implementation process, emphasis should be placed on effective
communication. Many theorists have identified communication as a key success
component in the execution of strategies (Prahalad, and Hamel, 1990). According
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to research, a company should implement a two-way communication programme
that invites and permits employee queries about matters relating to the developed
plan. Additionally, the messages should explain the rationale behind any changes
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in circumstances as well as the new responsibilities, duties, and activities that the
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impacted personnel must complete (Alexander, 1995).
There are few basic steps that can assist in the process and guarantee success of
implementation:
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1. Assess the strategic plan: The implementation process’s first stage is to

evaluate the strategic plan. It states that managers are required to be aware
of the strategic plan. They must thoroughly evaluate it and identify any parts
of the strategy that might be particularly difficult. Before starting to implement
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the strategic plan, it is important to highlight any parts of the plan that might be
unrealistic or too expensive in terms of either time or money.
2. Develop a vision for carrying out the strategic plan. This vision can take the
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form of a list of objectives that must be accomplished one by one or an outline

of tasks. Everyone needs to have a clear understanding of what the desired
outcome should be, why it is vital, and what the strategic plan is meant to
achieve.
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3. Choose team members to assist in carrying out the strategic plan:

Management must assemble a skilled team to assist in putting strategies
into action. They must choose a team leader who will motivate the group
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and can answer queries or deal with issues as they emerge. Schedule
meetings to talk about progress reports: Organize meetings and present
the list of goals or objectives, and let the strategic planning team know what
has been accomplished. Whether the implementation is on schedule, ahead
of schedule, or behind schedule, evaluate the current schedule regularly to
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discuss any changes that need to be made. Management must establish

a rewards system that recognizes success throughout the process of
implementation.

4. Involve senior management as necessary: It is wise to update the

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organisation’s executives on all operations and give them updates on
how the plan is being implemented. Making management aware of the
implementation’s progress makes them a part of the process, and should
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issues develop, management will be better positioned to address worries or
potential modifications.
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4.1.2 Objectives Setting
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Image :How to set planning Goals

Source: https://online.hbs.edu/blog/post/strategic-planning-goals
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Setting goals enables a business to advance and make future plans. Setting
objectives is part of the planning and research management performs to develop staff
capabilities and evaluate and enhance performance. Individual company’s capability
can be enhanced at all levels, from the individual to the departmental, by having a clear
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understanding of aim setting.
What is Objective Setting?
Objective setting is when an organisation plans goals and how to meet them on
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a realistic timescale. Objectives help define what each department’s and employee’s
responsibilities are within the organisation. Setting objectives is part of establishing
expectations for employees and managing them, which is also called the performance
management process.
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Types of Objectives:
Role Objectives
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Every role has a goal, which is typically outlined in the job description. For
instance, a server’s job description and role objective include serving customers and
ensuring their happiness. Role objectives outline what individual must complete and

why it is crucial. Role objectives are evaluated with the aid of performance standards
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like speed and accuracy.
Goals to be achieved
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Measurable outcomes from an employee are called target objectives. This could
gauge goals for output, revenue, services, cost cutting, or other things. For instance,
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individual could gauge a jeweler’s target objective by gauging daily sales volume.
Aims of the task
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Task objectives are goals achieved by completing smaller projects or jobs in
a timely manner. For instance, a department’s task objective may be the project’s
deadline.
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Behavioral goals
Although individual can create behavioural goals for an individual, managers
frequently set them for the entire department. The use of language, attire, behaviours,
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and speech that are reflective of the business and team is one of the behavioural
standards.
Performance objectives r
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Performance goals help outline what can be done to get better results and are
targets for enhanced performance. Performance goals may lead to performance
improvement plans that outline the steps that management and staff must follow.
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Goals for learning

Learning objectives assist identify areas where staff members and management
can advance their knowledge or abilities in the workplace. This could be arranged by
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management through specific training sessions or programmes.
How to set Objectives

1. Simplify Individual Goals
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Try to make individual goals simpler even though individual accomplishments may
be complex. Think about planning individual goals with a time limit in mind. When
outlining goals for the team, be sure that each team member fully comprehends how
they fit into the overall picture.
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2. Make sure individual Objectives are Precise

When defining goals, take into account alternate ways to achieve individual intended
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outcomes. Describe a thorough plan for achieving the goal once individual have
determined the best approach to get there. A team can better understand how to
achieve its goals by having clear objectives.3. Explain individual objectives to the
right members
When explaining individual objectives to employees, consider explaining only to
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those who need to understand the objective. Each employee involved in individual
plan can understand their part of the plan rather than the plan as a whole. Those

higher in management may benefit from higher-level objective plans, while other
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employees may need to only understand what policies they may change and how
that change can benefit the entire company.
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4. Ensure individual Goal is Measurable
Measurable goals are simple for employees to comprehend. Instead of having a
vague purpose, think about making sure individual goal is a measurable number.
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The phrase “We can make $1,000 more” is slightly more appealing to workers than
the phrase “We can enhance profit.” Individual can determine when individual have
accomplished individual goals by measuring them.
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5. Break individual Aim into more Manageable Objectives
It could be beneficial for individual team to break up big goals into smaller ones
when working on them. Individual employees will comprehend the goal and be able
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to celebrate their progress toward it more easily if it has several steps. Instead of
finishing one huge objective over the course of many months, a department might
feel more satisfied by fulfilling a number of smaller goals over a short period of time.
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6. Recognize every Step of the Process
A department may be grateful for and rejoice in met deadlines. This not only boosts
staff morale, but it might also improve future departmental communication initiatives.
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Encourage individual Staff to Work toward achievable Goals
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When setting individual goals, attempt to keep in mind the constraints facing
individual business. When setting objectives, some management executives like to
use stretch goals. Stretch goals are targets that go beyond the original objective.
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4.1.3 Task Setting

In this highly competitive environment, businesses need to think strategically
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in order to survive and prosper. The five fundamental tasks of strategic management
are as follows. They entail creating a strategic vision and mission, establishing goals,
creating tactics to attain those goals, putting the tactics into practise and executing
them, and assessing and measuring performance.
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Developing a Strategic Vision and Mission

Putting management’s long-term perspective of where the company is going on
paper and communicating that to the employees constitutes the first stage in developing
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a strategic vision and purpose. The vision and mission are the components of this step.
The organisation’s purpose is outlined in its mission. Companies in the same industry
frequently have mission statements that are similar. The vision represents the direction
that management sees the business taking. The CEO is often in charge of this task.
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The mission and vision should not be conjured up by the executive leadership.
Every company has a mission statement and a vision statement. The vision may
occasionally just exist as concepts in the minds of top management. Management
needs to identify it and let the staff know what it is. A mission and vision that are clear
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and straightforward will aid the organisation in cooperating for a common goal. The
other stages of strategic management also make use of it.

Setting Objectives
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Setting objectives, the second stage, uses the strategic vision to generate precise
goals that will be achieved in order to realise what is stated in the vision statement.
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Goals should be reachable but challenging to achieve. Stretch objectives are those that
require the company to go above and beyond what is necessary to achieve the goal.
Goals that are too modest will lead to complacency. By establishing these objectives,
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individual may clear up any uncertainty staff may have about what has to be done.
Managers are able to set both financial and strategic goals. The definition of
financial objectives is “what management aims to achieve in dollars and cents.”
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Strategic goals are those that aim to improve competitive position, increase market
share, or provide an edge over competitors. Whereas financial objectives are viewed
more as a limitation, strategic objectives have the ability to inspire and spur action.
Managers should specify both objectives, but focusing on strategic goals will produce
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superior outcomes.
Both long-term and short-term objectives should be set. Short-term objectives will
motivate present performance while long-term objectives will put the company in the
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proper position to achieve what is outlined in the vision down the road. Priority should
be placed on long-term objectives over the short-term. Companies that stress short-
term objectives end up in business short-term.
Crafting Tactics to Achieve Organisational Objectives

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Management determines how to accomplish the given objectives in the third step,
which involves developing organisational objectives and methods. Management makes
decisions in this phase about how to adapt to environmental changes, outperform the
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competition and advance the corporate vision and strategic goals.
Implementing and Executing the Tactics

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The fourth phase, putting the tactics into action, entails choosing which firm
resources should be dedicated to each activity, setting policies, inspiring workers,
providing the tools required to accomplish goals and fostering a culture of continual
improvement.
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For strategies to be effective, organisational capabilities and culture must be taken

into consideration. Change will probably be required, but how much will depend on how
novel the approaches are. This typically entails changing policies or resource allocation,
rearranging personnel, retraining and retooling, or altering incentive structures. To
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successfully implement each approach, each manager must consider the methods and
their department.
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Evaluating and Measuring Performance

The management checks if the strategies used to accomplish organisational goals
and adhere to the strategic vision are effective in the fifth step, which involves reviewing
and monitoring performance. Corrective action needs to be made if performance falls
short of expectations.
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Different metrics, including financial information, consumer feedback, quality

reports, staff happiness, and capital usage, can be used to assess performance. To

fully understand a tactic’s effectiveness, it is important to examine it using each of these

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types of measurements.
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Figure: Five tasks of strategic management
Source : https://slideplayer.com/slide/7575370/24/images/35/Figure+1-1%3A+The+
Five+Tasks+of+Strategic+Management.jpg
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4.1.4 Resource Allocation
What is Resource Allocation?
The practise of assigning and managing resources in a way that meets a

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company’s strategic planning objectives is known as resource allocation. Allocating

resources involves managing hard assets like hardware to maximise the usage of soft
assets like human capital. In order to maximise the use of scarce resources and obtain
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the maximum return on investment, resource allocation entails balancing competing

requirements and priorities. Prior to allocating resources, organisations must decide
on their desired outcome, such as higher income, increased productivity, or improved
brand awareness. The next step is to determine what resources will be required to
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achieve that aim. While resource allocation often refers to activities related to project
management, the term is also used in other contexts, including the following:
◌◌ economics, where it is a component of public finance; and

◌◌ computer storage, where it describes how operating systems manage data
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storage resources.
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Figure :Resource Allocation Process

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Source: https://img.favpng.com/12/24/1/resource-allocation-marketing-plan-
management-png-favpng-h3A4yzxGkk9hszRMAQwkrvWPZ.jpg
How to Allocate Resources on a Project

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The following five steps are important when allocating available resources as part
of project management:
1. Plan. Project managers must first create a project map. They must break the project
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down into individual tasks and decide which talents are required. They must also
look at any restrictions, such as budget and deadlines. In addition, project managers
should choose possible team members based on their qualifications and availability.
They must also identify task dependencies that might interfere with the completion
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of particular phases. A work breakdown structure, which creates a budget and

associates each activity with start and end dates, is also necessary for planning.
2. Evaluate accessibility. The availability of a team is impacted by absences due
to illness, vacation, holidays, and other work. Managers must develop channels
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of communication with the team during this phase in order to convey resource
allocation, shifts, and changes to the project’s scope or timetable. To promote cross-
team collaboration and maximise the use of shared resources, open communication

is essential. Additionally, it aids in locating team members who might slow down the
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project because of competing obligations or multitasking.
3. Schedule. Managers delegate work and create project schedules. To automate,
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streamline, and enhance task management, they employ resource management
technologies. By effectively managing workloads, team members can avoid burnout,
spot opportunities to develop their abilities, and see when more help is required.
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Setting aside time for important tasks and indicating their priority levels are also part
of resource scheduling.
4. Track. Once the project has started, it’s critical to follow team members’ progress
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and evaluate how well they carry out their duties. The distribution of resources
should be changed to take advantage of newly created opportunities and maximise
efficiency. Project management software and tools, as well as business intelligence
tools, make it easier to gather the real-time data required to make sure the team
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stays on track with the project’s timeline.
5. Evaluate. Metrics that demonstrate how successfully the project accomplished
objectives serve as the basis for evaluating the project’s success. These results’
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data can be applied to new projects’ resource allocation plans to improve them.
Benefits of Resource Allocation
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12 important project management skills
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Figure: What is Resource Allocation

Source: https://www.techtarget.com/searchcio/definition/resource-allocation
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Effective Resource Allocation offers the following Benefits:

●● Collaboration. Allocating resources promotes teamwork and aids in team
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communication. Communication with stakeholders regarding the status of strategic

goals is made possible by a resource allocation plan.
●● Efficiency. Teams that have access to the resources they need to accomplish a
project on time and with little waste benefit. Project teams can avoid errors caused
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by incompatible dependencies by using a sound resource allocation strategy.

●● Team spirit. Allocating resources more effectively raises team morale and
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employee engagement. A more equitable division of tasks is made possible
through resource allocation, ensuring that no team member is overburdened. As
team members’ wellbeing improves, they have the capacity and freedom to take
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on more work, which can increase productivity.
●● Cost reduction. Effective resource allocation can result in significant cost savings
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because it increases efficiency, reduces waste and avoids costly mistakes,
setbacks and delays.
Challenges of Resource Allocation
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Figure: Challenges in Resource Allocation
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Source: https://lh6.googleusercontent.com/twyXZbp2tCh2ohAn-
C0d6caO-3gpG02Afv-85o7yU8QnHsjFqVdR7tpbH3zeF_
EwYQCaRBWHtSafoH5mg7wNIvUJlkVvA_uhWuABQt_BfjVUgixM-
cDraPpcjSF04y_6WpSsgVBm
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There also are Challenges associated with the Resource Allocation Process,
including the following:
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●● Resource scarcity. There are instances when not enough resources are available
to complete all of the tasks outlined in the project plan. Throughout the project,
some resources might only be partially available. In other instances, project
resources could be accessible at the start of a project but not as it advances.
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●● A skills gap. If some abilities are in scarce supply, it can be detrimental to the
project. The required additional hiring or training may require time that isn’t
planned for in the project’s schedule.
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●● Excessive resource allocation. Efficiency and production can also be severely

impacted by having too many resources. If more resources are assigned to a task
than are required, staff members could get overburdened in their attempt to utilise
them all.
●● Visibility Project managers may fail to allocate the proper resources where they
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are required as a result of poor visibility into the specifics of how a project is
proceeding. The ability of a company to predict the needs of upcoming projects

might also suffer from a lack of visibility, which can result in resource misallocation
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in the future. Lack of visibility is frequently brought on by the absence of a
centralised resource planning tool.
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●● Miscommunication. Numerous issues might arise as a result of poor
communication between team members or teams. The sales and delivery teams,
for instance, frequently miscommunicate. The team responsible for delivering the
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product to the client may not be able to guarantee that resources are allocated
effectively and that the deliverables meet customer expectations if it is not made
aware of all project requirements.
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●● Outdated technology. Older technologies, such a spreadsheet programme, might
not offer enough real-time data for tracking. As project requirements change, this
may result in missed opportunities or an excessive allocation of resources.
●● The scope-creep. Any time during the course of a project, the scope may alter,
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changing the required resources. The term “scope creep” refers to a change to a
project’s original objectives or activities, which can cause ongoing adjustments or
uncontrolled scope growth. If needs are introduced repeatedly, resources could be
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depleted and team members might suffer.
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Figure: Resource Allocation Steps

Source: https://www.toolshero.com/wp-content/uploads/2020/04/resource-
allocation-steps-toolshero.jpg
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4.2 Control
●● Importance of Control in Strategic Planning
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●● Control as per Organisational Structure

●● Role of Leadership
●● Role of Culture
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●● Strategic Control
●● Types of Strategic Control
●● Importance of Strategic Control
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●● Factors affecting Strategic Control

Introduction
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Figure: Strategic Controlling
Source: https://ceopedia.org/images/thumb/c/c4/Strategic_controlling.png/400px-
Strategic_controlling.pngr
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The purpose of strategic controls is to guide the business in its long-term strategic
orientation. After a strategy has been chosen, it is gradually put into practise to help
a company navigate a quickly changing environment. Strategies are forward-looking
and founded on management expectations for multiple yet-to-happen events. The
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goal of conventional techniques to control is to contrast actual outcomes with an ideal.

After finishing the work, the management reviews it and uses the evaluation to guide
future efforts. Although this method is not useless, it should not be used to manage
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a strategy. Waiting until a strategy is completely implemented frequently takes five or

more years, during which various changes take place and have a significant impact on
the success of the plan in the long run strategy. As a result, strategic controls that take
into account the particular control requirements of long-term strategies must take the
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place of conventional control approaches. Monitoring the strategy’s execution, spotting

issues or changes in the environment, and making the required adjustments are all part
of strategic control. Strategic control, as opposed to post-action control, is concerned
with directing and controlling actions taken in support of the strategy.
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Strategic Management Process

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1. Outlining the tiers of the Company’s Strategic intent:

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o Creating a mission statement,
o Creating a vision,
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o Creating goals
2. Strategy Formulation
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o Environmental and Organisational Assessment
o Strategy consideration
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o Strategic analysis
o Strategy creation
o Strategic plan preparation
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3. Strategy Implementation
o Executing strategies
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o Creating systems and structures
o Managing behavioural and functional implementation
4. Strategic Evaluation and Control
o
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Conducting evaluation
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o Using control
o Creating new strategies
Defining an organisation’s vision, goal, and objectives, scanning the environment,
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developing strategies, and evaluating and controlling those plans are all part of strategic
management.
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4.2.1 Importance of Control in Strategic Planning

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Figure: What is Strategic Control

Source : https://image2.slideserve.com/5337034/strategic-control1-l.jpg Strategic
Control Meaning
A technique for managing a strategic plan’s execution is called strategic control. It

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is regarded as special in the management process since it can handle the ambiguous
and unknown while monitoring the implementation of a strategy and the consequences

that follow. To put it another way, strategic control is a way to develop new ways to carry
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out a strategy by adjusting to shifting internal and external elements.
A strategy is usually implemented over a significant period of time during which two
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major questions are answered:
a. Is strategy implementation taking place as planned?
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b. Taking the observed results into consideration, does the strategy require
changes or adjustments?
The definition of strategic control reveals that it is an evaluation process targeted at
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attaining the strategic objectives stated by an organisation. During the implementation
phase, the process is critical for bridging gaps and adjusting to changes.
The Strategic Control Process
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Every technique of strategic evaluation follows the same method. Here are the six
steps involved in the strategic control process:
1. Choosing what to Control in step one
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Prioritize the evaluation of components that have a direct bearing on the organisation’s
mission and vision and that can have an impact on its objectives.
2. Setting Requirements r
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Actions from the past, present, and future must be assessed. Managers can evaluate
progress and monitor goals by setting qualitative or quantitative control standards.
3. Performance Evaluation
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Assuring that standards are being met can be done by measuring, addressing, and
analysing performance on a monthly or quarterly basis.
4. Performance Comparisons
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To establish whether an organisation is falling short of the benchmark set and

whether these discrepancies between target and actual are typical for that industry,
performance comparison is conducted.
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5. Analyzing Deviations
If there are deviations, managers have to analyze performance standards and
determine why performance was below par.
6. Corrective Action
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If a deviation is due to internal factors such as resource shortage, then managers

can act to sort them out. But if it’s caused by external factors that are beyond one’s
control, then incorrect actions can worsen the outcome.
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Traditional control concepts have to be replaced by the strategic control process, as

it recognizes the unique needs of long-term strategies.
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Importance of Strategic Control

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Figure: Importance of Strategic Control
Source: https://www.semanticscholar.org/paper/The-Importance-of-Strategic-
Management-to-Business-Tapera/917472d5058a8aaf4b3b41e6dcb75be98201b00f
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Let’s look at the importance of strategic control:
●● Measuring Progress
Strategic management can be used to gauge organisational development. Based
on the likelihood, an outcome is chosen and/or implemented as a strategy. Results
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must be monitored both during and after implementation in strategic management.

This also enables prompt corrective actions.
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●● Recommendations for Future Actions

Strategic management aids in recycling actions that are crucial for accomplishing an
organisation’s goals because it is continual. This serves as the basis for adjusting
and applying changes to other upcoming procedures.
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●● Commendations and Recognition for Performance

For performance, the desired result, and talent retention, a reward system based on
performance that acknowledges employees throughout the implementation phase
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is essential. Strategic control’s goal is to enable managers to recognise and respond

to changes in the environment.
Strategic Control Example

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Here are some Examples of Strategic Control:
1. A courier company makes the decision to increase performance by

establishing a 100% on-time delivery target. The control system automatically
alerts managers to problems even if the delivery rate drops by 1%. By
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employing such a control system, the organisation enables its management

to take fast remedial action in response to any issues with delivery or
performance.
2. Picture a factory that creates widgets. Strategic control assists an organisation

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in evaluating the recruiting criteria and employee onboarding to make
necessary adjustments for meeting the strategic goals of the business if
the mistake rate exceeds the desired limit or the number of widgets is lower
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than anticipated. Managers must be fully aware of strategic control meaning
to realize that it’s a steering wheel that they can use to navigate their
organisation toward its mission, vision and long-term goals.
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Control methods are essential for resolving issues relating to strategic
management. Enroll in the Harappa track to establish a comprehensive strategy
for problem-solving. Create a bi-focal strategy that will allow individual to view every
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scenario from all possible perspectives. The Balcony and Dance Floor framework
encourages both reflection and action at the same time. To thoroughly investigate a
problem, use hypothesis trees. We’ll get individual ready for a field where switching
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between concepts quickly while spotting patterns, linkages, and trends is essential.
4.2.2 Control as per Organisational Structure
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Organisational control is the process of continuously allocating, assessing, and
controlling resources to achieve an organisation’s objectives. Managers must learn how
to share information with employees in order to effectively manage an organisation.
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They also need to be aware of the performance requirements.
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Control can be interpreted in two ways: either narrowly, as the steps a manager
takes to ensure that actual performance complies with the organisation’s plan, or
widely, as anything that modifies an organisation’s processes or activities. The
definition of managerial control in the content that follows the broad meaning is that it
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entails assessing performance against a plan and making appropriate changes to the
operations or the plan.
The six major purposes of controls are as follows:

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◌◌ Controls help make plans work. If they want to succeed, managers must track
progress, provide feedback, and lead their staff.
◌◌ Controls ensure consistency in organisational behaviour. Policies and
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procedures aid in ensuring the integration of activities.

◌◌ Controls help organisations function effectively. Controls must be in place for
organisations to attain and meet their goals.
◌◌ Controls increase organisational effectiveness. Controls are perhaps the
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managerial role on which efficiency depends the most.

◌◌ Feedback on project status is provided by controls. Controls don’t just monitor
development; they also give participants feedback. Behavior is influenced by
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feedback, which is a crucial component of the control process.

◌◌ Controls aid in decision making. The ultimate purpose of controls is to
help managers make better decisions. Controls make managers aware of
problems and give them information that is necessary for decision making.
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Numerous people contend that just as organisations have altered, so too must
management controls. In today’s world that is changing quickly, new organisational
structures like self-organizing organisations, self-managed teams, and network

organisations enable organisations to be more flexible and adaptive. The empowerment

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of employees is also fostered by these forms, much more so than in the previous
hierarchical organisations.
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Figure: Creating an Organisational Structure
Source: https://saylordotorg.github.io/text_mastering-strategic-management/s13-
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02-creating-an-organisational-str.html
Four different types of organisation structures have been identified for managing
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the tasks of the organisation. These are
i) A centralized functional structure : Technically speaking, functional organisation is

functional foreman-ship because the function acts as a supervisor and the employees
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carry out their assigned responsibilities on their own. Functional organisational

structure places more of an emphasis on operations than management. In corporate
organisations, functional organisation is frequently utilised. Functional organisation
exhibits the spirit of organisation, which entails combining responsibilities and
assigning them to real employees.
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Systematically grouped functional sets include marketing, finance, production,

and personal. According to the needs of the business, departments and sub
departments are created. Functional organisation is the fundamental component
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or skeleton on which other organisational structures are constructed. Function,

sub-goal emphasis, labour division, functional relationships, centralization and
decentralisation, span of control, divisionalization of product, and regionalization
are characteristics of functional organisations. While some employees have similar
interests and attributes are brought together to form a collection of similar activities,
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not all employees are created equal; others have distinctive and particular interests
in various activities. Their effectiveness and control become simple. Effectiveness of

the organisation is increased with the development of functional organisation which

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may be horizontal or vertical. Horizontal functions include those activities which are
performed with the same amount of authority and responsibilities at the same level.
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(ii) A decentralized divisional structure,
(iii) A hybrid (matrix) structure, A matrix organisational structure has flows of duties that
are horizontal, vertical, and diagonal. Matrix structure refers to the mathematical
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structuring of anything using rows and columns. In a matrix organisation, the
horizontal or row elements could represent the functional lines of manufacturing,
marketing, etc. whereas the column elements could be products or projects. The
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regional obligations may run in a third dimension. Several distinct structures can
be combined to form a matrix structure. Consequently, a foreign subsidiary in a
global matrix organisational structure may report to more than one group, such as a
functional, geographic, or product/project group.
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(iv) Network/coupling structure. The integration of management control systems with
responsibility centres is a crucial component of their design. Given the close
relationship between the control system and the organisational structure, it is crucial
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to be aware of the major control factors while selecting an organisational structure.
Efficiency and effectiveness, economies of scale, coordination issues, assignment
of profit responsibility, and efficiency and effectiveness are all significant factors that
might influence the choice of structure. r
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(v) Conflict and cooperation. Since activity level and efficiency are correlated, efficiency
rises as activity level does. Size allows for the division of labour and specialisation
within each profession, which in turn leads to an improvement in production because
the work at hand is better understood. Functional structures therefore have a greater
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chance of boosting productivity. The advantages of efficiency, however, are only

accessible up to the optimal size, or the size at which it runs at the lowest cost per
output.
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A subdivision will be required to take advantage of economies of scale, even though

functional structures offer the advantage of economies once the optimum size is
exceeded. Finding the ideal organisation size in practise is frequently challenging.
Another crucial factor in designing an organisational structure is the division of profit
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responsibility. The divisional structure offers the advantage of assigning a task

to the divisional manager, even though it is challenging to do so in the case of
functional organisations. This is a critical proponent of divisional organisation from
the perspective of control systems.
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However, it should be noted that departments within a division are set up on a

functional basis, therefore the control issue facing the division is identical to the issue
faced in functional organisations. If there is increasing interconnectedness and it is
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challenging to place precise blame for target non-attainment, the concerns associated
to conflict and cooperation become more important. As compared to divisional
structures, functional structures place total responsibility for the project or programme
in the hands of the manager, whose sole responsibility it is to plan, coordinate, and
integrate the activities that cross multiple functions. As a result, inter-function conflict
(c
is likely to be more intense in functional structures. In such organisations, functional

managers are in charge of technical duties and are expected to give project/program
managers all essential assistance.

Due to the problem of spread responsibility in this structure, it is challenging

Notes
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to determine who is accountable when goals are not met. The three-tier cooperative
organisation structure, in which each tier is an autonomous organisation but is
interlocked with the next level, is an example of a network/coupling kind of structure
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that is better suited when it is necessary to construct autonomous but mutually linked
organisations. Additionally, these arrangements are more appropriate when there is a
need for stronger inter-enterprise cooperation across numerous autonomous firms that
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are working toward the same goal.
4.2.3 Role of Leadership
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An organisation is a structure where people from various backgrounds, educational
experiences, and varied interests come together to work toward a shared goal.
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Describe Leadership
Leadership is the skill of controlling the workforce and getting the most from
it. For them to perform at their highest level at work, employees shouldn’t view their
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employment as a burden.
Employees are able to work as a cohesive team to achieve a common goal when
there is strong leadership in place.
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Why leadership at the workplace?
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It is rightly said that success and failure of an organisation depends on its leader.
Leadership inspires workers to make significant contributions to the success of

both their teams and the company.
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Effective leadership encourages people to collaborate closely at work and work

diligently to complete projects within the allotted time frame.
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A job mismatch at the workplace leads to politics and eventually demotivated

employees.
◌◌ The employees are not forced to do job by a good boss. According to each
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person’s interests and areas of expertise, jobs and responsibilities must be

assigned.
◌◌ Employees are given a feeling of direction through leadership. Every person is
aware of his responsibilities at work.
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◌◌ The likelihood of politics and conflicts in the organisation is decreased by

competent leadership. A company’s employees stay with it for a longer period
of time when they are led by capable individuals.
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Employees require a mentor who will also correct them when they are in error.
A good leader is one who supports the followers in their tasks and inspires them to
produce outcomes consistently. Effective leadership helps to fortify the bonds between
employees and enables them to grin through even the most trying circumstances.
In the current environment, leaders should act more like mentors than stern
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superiors. The current circumstance does not support the “Hitler Approach.”The

manager must engage with the workforce more frequently. Find out what they anticipate
Notes
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of the company and theirself. Take initiative and encourage them to think creatively.
◌◌ A leader must serve as a steadfast source of encouragement for the team.
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People must be able to rely on the leader when things get tough. Never mock
their issues or unnecessarily criticise them. Problems cannot be unresolved.
◌◌ In conflict situations, a leader must step in and resolve the issues right away.
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Let people talk about their issues face-to-face while they are seated. Never
show bias toward anyone.
◌◌ A leader ought to serve as a good example for the team. Be a motivating force
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for them.
◌◌ Be aware of the activities of their team members. Keep track of the work they
do. Performance evaluations are crucial. Request that the staff keep their
updated as well. Recognize each team member who has performed well.
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People who aren’t performing at their best need to be handled carefully and
patiently.
◌◌ Don’t be too harsh with the staff. Also comprehend their issues. A person
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won’t often go to work on their birthday or anniversary. Be a tiny bit more
pragmatic.
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Image: Leadership features

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uploads/2018/03/30183048/p223.png
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4.2.4 Role of Culture

A phrase used to describe particular patterns of behavior, including rituals, laws,
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and identity within a workplace is “organisational culture.” Particularly, culture serves as

a tool for reining in conduct and fostering belonging and stability within an organisation.
People who deviate from normative behaviour patterns or reject the cultural norms of
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their workplace may be viewed negatively or as deviants. To establish social norms

and a feeling of shared values within the firm, company executives establish cultural
controls.
Unwritten Social Norms

(c
1. The majority of big businesses claim to value uniqueness, but in practise

they foster conformity. In truth, the majority of companies have expected levels of
behavioural norms, regardless of whether they promote uniqueness or uniformity.
Social norms are unwritten behavioural guidelines that specify how people should
Notes
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behave in particular circumstances. Peers impose these through the use of social
penalties. An individual who speaks out against unethical actions, for instance, can face
rejection and exclusion from future group activities if their organisation has an unspoken
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rule of silence regarding such matters.
Mission Statement
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Every business has a mission statement, and the majority of them have it in
writing. The mission statement gives all members and staff a direction to follow in
terms of activities, behavior, and quality control. A company’s culture is not something
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that just happens. It is purposefully cultivated and created, with the mission statement
serving as the foundation. A mission statement like “Our aim is to inspire and nurture
the human spirit—one person, one cup, one neighbourhood at a time” connotes high
moral standards, involvement in the community, and excellence. It offers a foundation
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for organisational culture and expectations for employee conduct.
Rule and Regulations
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The employee handbook their received on their first day of work provides useful
information on the culture and techniques of behaviour management at their company.
Nondisclosure agreements, anti-discrimination rules, anticipated work schedules,
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standards of conduct, and basic information should all be included in most corporate
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handbooks. Many of them are included in accordance with federal or state law, but
other corporate policies follow the structure and culture of the company. If they break
these rules, their superior may give their verbal or written reprimand or, in the worst
situations, fire. In some cases, rules and regulations become ingrained in the common
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values and social conventions of the culture of the organisation.
Deliberate Role Modeling

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For a set period of time after being hired, they receive training. In terms of culture,
this training stage is intentional role modeling. Their boss or trainer demonstrates to
their how the company operates, what they are expected to do, and how to behave.
Organisations that require membership can also use this. As people turn to leaders
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for cues or reminders about what’s important, deliberate role modelling continues
throughout their membership or job. If leaders don’t behave in a way that is consistent
with the organisation’s ideals, members and staff start to feel jaded and resentful.
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The Role of Culture

Knowledge managment hinges on developing a system of shared values and norms,
and a management style that seeks employees’ knowledge.
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Management style is based on a shared culture, trust rather than hierarchical command
and control, and respect for the knowledge of the workers.
Receive guidelines for embarking on the complex process of assessing your culture and
changing it to fit with successful knowledge management.
Image: Role of Culture
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Source: https://image.slidesharecdn.com/4-161220120414/85/the-role-of-culture-
in-a-successful-knowledgemateri-pelatihan-knowledge-management-2-320.
jpg?cb=1482235558
4.2.5 Strategic Control

Notes
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●● Process used by organizations to control the formation
and execution of strategic plans; it is a specialized form
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of management control, and differs from other forms of
management control in respect of its need to handle uncertainty
and ambiguity at various points in the control process.
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●● Focused on The Achivement of furure goals.
●● SC involves traching a trategy as its been implemented. Its also
concerned with detecting problems or changes in the strategy
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and making necessary adjustments.
Figure: Strategic Control
Source: https://image.slidesharecdn.com/strategiccontrol-150425081649-
conversion-gate01/85/strategic-control-2-320.jpg?cb=1429949879
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To make sure the organisation’s strategy aids in attaining its goals, an organisation
must integrate its strategy and control systems. Strategic control focuses on ensuring
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that the organisation is moving in the direction of attaining its strategic goals
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and maintaining an effective alignment with its environment. According to Griffin,
organisational structure, leadership, technology, human resources, and information and
operational control systems are the five focuses of strategic control. Without an efficient
evaluation and control mechanism, an organisation cannot function. Control is any
procedure used by management to match the behaviour of the organisation’s systems
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and employees with its objectives and interests.
Control is actually the control of an organisation’s operations so that managers and

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other staff members can receive some sort of performance or goal-related feedback.
Systems for sound control aid in an organisation’s effectiveness and efficiency. Control
systems are “evaluative and feedback mechanisms to let people know their managers
are paying attention to what they do and can recognise when undesired deviations
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occur,” according to one definition of a control system. Control therefore compares the
organisation’s performance with where it is today and where it should be. Additionally, it
alerts management to take any necessary remedial action.
For instance, A Courier Service has a performance target of 100% on-time delivery
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of all of its packages to clients. The control system would alert managers to the issues
when the company discovered that its on-time delivery rate had dropped to 98 percent.
The management can then take the necessary steps to address the issue and improve
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delivery performance above 98 percent.
4.2.6 Types of Strategic Control
3 Types of Strategic Control

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Strategic controls are mainly of 3 types:
1. Financial Controls.

2. Output Controls.
Notes
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3. Behavior Controls.
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control.jpg?resize=1280%2C452andquality=100andssl=1
1. Financial Controls
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The financial resources of an organisation are the focus of financial control
systems. Both financial resources and funds are moving in and out of the organisation
on a daily basis. The organisation holds some cash resources for internal use or
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for other purposes. Financial control systems are used by managers to gauge an
organisation’s financial performance. They define financial goals (such as growth,
profitability, and returns to shareholders) and then measure the actual achievement of
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those goals in order to implement effective financial control. Budgetary control, financial
statements, ratio analysis, and financial audits are the most often used financial control
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instruments. A budget, which is a plan expressed in numbers, is used to accomplish
budgetary control.
Although a budget (annual, quarterly, or monthly) may be defined in quantitative

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terms (units of output, time, etc. ), it is typically expressed in financial ones. Budgets
may be created by managers for the entire company or even for certain departments
and divisions. They gauge performance using the budgets.
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Additionally, budgets aid in comparisons between years and even between

departments and divisions. A balance sheet, income statement, cash flow statement,
and funds flow statement are the four key components of financial statements.
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Calculating financial ratios to evaluate an organisation’s financial health is the

focus of ratio analysis. Liquidity ratios, debt ratios, coverage ratios, and operational
ratios are among the significant ratios that are frequently utilised as components of
financial control. An organisation’s staff may conduct an internal audit of its finances,
and authorised chartered accounting firms may conduct an external audit.
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2. Output Controls/Operations Control

For the output control system, managers project performance objectives for each
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person and unit. They project how well the end employees of the units will actually
perform. Finally, they contrast their actual performance with the expectations they
have already set. The output control itself offers an incentive structure for employee
motivation in the organisation when the performance of employees or units is
connected to the reward system.
(c
Screening control and position control are two different types of output control. The
first one is concerned with upholding quality standards for goods or services throughout
the actual production or delivery process. The latter is concerned with the quality of the
Notes
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items following transformation.
3. Behavior Controls
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A behavior control system refers to a comprehensive system of rules and
procedures. These are prescribed to direct the behavior/actions of employees at each
level of the organisation. Rules and procedures standardize the way of reaching the
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goals.
Two forms of behavior control are;
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i. operating budgets,
ii. standardization.
The operating budget includes the allocations of resources that need to be used
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for achieving goals by managers. Most commonly, managers at one level allocate to
managers at a lower level a specific amount of resources to use to produce goods and
services. Managers’ efficiency .depends on to what extent they can stay within the
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allocated resources, i.e., the budget.
The degree to which a business unit outlines how choices are to be made so that
employees’ conduct becomes predictable is referred to as standardisation. ’ A business
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unit can standardise inputs (items that are used to generate goods or services, such as
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labour, raw materials, and parts), conversion activities (planning work activities so they
are done in the same way again), and outputs (performance attributes of final goods or
services).
All these are parts of behavioral control. Successful strategy implementation

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requires, among others, a control system that matches the organisation’s strategy.
Strategic managers should ensure that financial and output controls are supplemented
with behavior controls for efficient achievement of goals.
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Monitoring
Strategy implementation requires a framework both for monitoring various actions
undertaken to implement the strategic plan and for offering recommendations to make
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adjustments to the actions to fulfill the vision of the organisation better as outlined in the
plan.
The framework for monitoring offers a way to gauge the impact of each action,
identifies participants and their monitoring responsibilities, establishes a time frame
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for monitoring, and specifies how the monitoring programme could be documented.
With the help of the monitoring program’s data, decision-makers will receive
recommendations on what adjustments to the strategic plan may be necessary to meet
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specific goals in the plan. Monitoring operations will involve both the organisation’s
management and employees.
Evaluation Plan
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●● This strategic plan needs an evaluation strategy that focuses on determining

whether the already-set objectives have been met and whether it has had an
impact.

●● Along with keeping tabs on the plan-activities, CMS will also conduct an “impact
Notes
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review” to determine how the plan’s activities are having an influence on the
community.
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●● Evaluation must be conducted with the intention of giving shareholders and
owners and other audience’s relevant information.
●● Evaluation of the planned activities is anticipated to assist in determining the
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likelihood that the development and impact of the activities/programs will be
sustainable over time and what factors may affect sustainability.
The Timing of Evaluation and the Ways of Using Results
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An annual evaluation during the whole period of the strategic plan and impact
evaluation at the end of the plan would be worthwhile to gauge the level of progress of
various plan-activities and also the overall impact.
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Methods of Information Collection and Analysis of Information
The organisation can gather data through a variety of techniques, including a
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review of current documents (such as plan documents, surveys as special studies,
CMS journals, and other publications), use of data from the monitoring system, surveys
with predetermined questions, individual and group interviews, observation, meetings,
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discussions, and workshops, as well as tests (such as in training).
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For the analysis of the information, the assessors must employ both quantitative
and qualitative methodologies.
Output of Evaluation
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Evaluation results must be presented in the form of reports with easily

understood language. Based on the information in the evaluation reports, the
evaluators are required to make recommendations; these recommendations must at
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least be related to:
◌◌ What causes of action should be taken,

◌◌ How they should be implemented,
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◌◌ Who will implement them and when,

◌◌ What obstacles are likely to be present,
◌◌ And what will be required to ensure that the recommendations are
implemented.
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4.2.7 Importance of Strategic Control

Strategic control systems give managers the resources they need to direct and
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oversee their operations. Managers choose organisational structure and strategy first
in strategic control, and then they develop control systems to assess and track the
strategies. If variations are found, they finally adopt remedial actions by modifying
the strategy. Both proactive and reactive controls can be used in a strategy. Control
systems may keep a company on track by anticipating events in the future and
(c
responding to opportunities and threats when they are proactive. Strategic controls

that are reactive identify irregularities after the fact and then take financial remedial
Notes
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measures.
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5 Marketing Concepts are Production, Product, Selling, Marketing, and Societal
Marketing Concept. 00:00/00:00
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Managers can further improve productivity, quality, creativity, and customer
responsiveness with the aid of strategic control systems. Comparing total inputs and
total outputs allows strategic managers to gauge efficiency (how many units of inputs
are used to produce a unit of output). Strategic managers establish a control system
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to keep track of product quality. Managers can tell how well-made a product is when
there aren’t many or any complaints from customers, and when very few people
return it for repair (especially when it comes to machinery or equipment). Through the
decentralisation of authority, employee empowerment, and performance monitoring,
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the strategic control system can also aid in inspiring employees to consider innovation
lastly, the strategic control system makes employees more responsive to customers
through evaluating and monitoring employees’ behavior and contact with customers.
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The context of strategic control is different organisational structures. In order to

integrate its diverse components, an organisation builds a number of systems. The
information system, planning system, development system, assessment system,
and incentive system are the main organisational systems. Each of these systems
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contributes to strategic control. Some of these systems have a direct connection to

control, while others do so indirectly.
Information systems, for instance, are intimately related to evaluation since they
)A
show how the organisation is progressing. On the other hand, the development system
is carried out as a post-control action and is not closely related to the evaluation
system. Let’s examine how various organisational structures contribute to strategic
control in light of this.
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1. Information System:
An suitable amount of information is used to inform control action from start to
finish. The design of the information system is based on the control system, and
management information and management control systems are closely associated.

Notes
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Every manager in the company needs to be fully informed about his or her
performance, standards, and role in achieving organisational goals. Every level of
management must have an information system that is both adequate and timely for
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their unique demands.
Every management receives sufficient information thanks to the information
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system. The manager’s responsibility and authority serve as the criterion for whether
or not information is adequate for him or her, or, more specifically, for what kind of
information the manager requires in the context of those two factors. On the basis
of a detailed examination of the manager’s responsibilities, this can be decided. If
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the manager is not using any information to make a specific decision, it may merely
be intended to inform him and not meet his information needs. Therefore, an efficient
control system ensures that an executive receives only the information that they need.
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Another element that can be used for control and other reasons is the timely nature
of the information. Ideally, the manager should receive the knowledge at the precise
moment that he needs it to act. The concerned manager must take prompt measures to
fix the deviation.
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He needs information covering the operation of a time period that is subject to
control, at the right time, for this reason. Based on the information provided within the
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company, the control system operates efficiently. A manager decides what action can be
taken based on the information, which is used as a guide.
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2. Planning System:
Planning provides the full spectrum on which the control function is built, making
it the foundation for control. In actuality, these two phrases are frequently used in
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conjunction to designate the division in charge of production planning, scheduling,

and routing. It highlights the fact that an organisation’s behaviour and operations
are governed by a plan. Control keeps an eye on these deeds and behaviours and
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suggests remedies if deviations are discovered. Control also suggests that there are
objectives and benchmarks. The planning process establishes these objectives. Plans,
objectives, or policies in particular produce control. Planning thereby provides and
influences control. Not only that, but control also has an impact on planning in that it
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frequently provides information that is used for planning and re-planning. Planning and
control are therefore mutually dependent.
Due to their interdependence, planning and control systems should be properly

integrated. By building a consistency of strategic objectives and performance
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measurements, this integration can be accomplished. It is very crucial to prescribe

performance metrics that are strategic because it is sometimes claimed that “what their
measure is what their get.” Two factors must be considered while creating performance
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measures.
First, the performance measures should be used to determine whether the main
goals should be short-term profitability, growth and technical advancement, logistical
efficiency, or some other target. Second, as each manager is accountable for exercising
(c
control over his or her own area of management, the metrics should be related to that
area.

3. Development System:
Notes
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The goal of a development system is to improve employee performance in both
their current and most probable future positions, which they will have. Therefore, the
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goal of a development system is to improve results by expanding organisational
capabilities through people. These findings then serve as the foundation for the control.
4. Appraisal System:
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Evaluation or performance A systematic review of the person’s performance
on the job and development potential is part of the appraisal system. An individual’s
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abilities and potential for improved performance are taken into account in addition to his
performance while appraising him. As a result, the appraisal system gives the control
system information about how people are performing..
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5. Motivation System:
The motivation system is connected to the overall organisational structure as well
as the control system. An important roadblock in the control process is managers’ lack
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of motivation. Motivation is crucial to this process because the main goal of control is to
ensure that organisational goals are met. It motivates managers and other staff to work
more, which is essential for the success of the company.
4.2.8 Factors Affecting Strategic Control

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To gain a lasting competitive advantage, strategic management is the methodical
process of assessing, coordinating, and putting plans of action into action. Changes in
strategic management may be influenced by internal or external business organisation
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factors. These variables include management tasks, structural changes, rivalry,

socioeconomic variables, laws, and technology.
Executive Management Changes

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Changes in strategy are influenced by changes in the board of directors’ makeup or

the resignation of the CEO. The newly hired members of the management team might
want to assess the current plans with the goal of introducing fresh concepts to advance
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the company.
Transformations in Organisational Structure

Strategic realignment is required in response to structural changes including
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mergers, acquisitions, and worldwide market expansion. Such developments

necessitate changes in strategic management since they affect their organisation’s
ownership, management, capital, and market structures. To reconcile and realign the
)A
organisation’s missions and goals, their business must modify current tactics and create
new ones.
Competition from Other Businesses

In an effort to increase competitive advantage, strategies must be urgently
(c
reviewed in target markets where competition is increasing. To analyse strengths,

weaknesses, opportunities, and threats and modify existing strategies, businesses use
strategic tools like a SWOT analysis. Their competitive edge is threatened, for instance,
by issues like competitor product imitations. By addressing the innate dangers and
Notes
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vulnerabilities, they can change course by altering their methods.
Social and Cultural Factors
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Changes in strategic management may be required as a result of their target
markets’ social and cultural characteristics. Particularly when entering new markets or
developing new goods for particular market segments, their want to make sure that their
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company’s strategic orientation is revised to take demographic and cultural sensitivities
into consideration.
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Statutes and Rules
Strategic management changes are influenced by changes in the law, including
tax, environmental, and healthcare laws. Their company’s current strategies must be
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modified to take the new legal obligations into account. For instance, their might need to
assess their production or supply chain management techniques in order to comply with
a regulation requiring there to lower their carbon impact.
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Technological Forces in Strategic Management
Due to the presence or absence of suitable technological skills, their organisation
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may need to adjust its strategies. The purchase of capital resources, such as
automated machinery and cutting-edge technology, may force their company to
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boost production rates and modify supply chain operations. Strategic management
developments are influenced by trends in information technology as well. For instance,
the increasing importance of e-commerce may force their company to adopt online
distribution techniques instead of brick-and-mortar distribution tactics.
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Case Study
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Steve Jobs leadership
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In the 21st century, at the height of computer technology developments, Steve Paul
Jobs’ name has dominated the world of leadership. Steve Jobs, who was born in 1955,
was a corporate innovator of the highest class. Jobs was still regarded as a symbol of
transformational leadership up to his passing in 2011 (Pea 2005).
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Jobs was well-known for his accomplishments and leadership roles, including
his roles as co-founder and chairman of the renowned Apple Inc. Jobs couldn’t
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be characterised by a single style of leadership, unlike his competitors who can
easily identify their own. He was endowed with a variety of traits that allowed him to
navigate the corporate world and accomplish such great success. His life experiences,
particularly those from his adolescent years, were crucial in shaping his personality, as
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he did not complete his college education.
Steve Jobs pushed graduates to recognise success and possibilities in the failures
that life presents in his 2005 lecture at Stanford University, highlighting a number of life
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situations that had affected his life. He had a strong belief in having faith and making
connections in life, especially through difficult times. He rarely regretted his choices,
including the expensive institution he chose, which made it difficult for his parents to
afford the tuition. r
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He dropped out as a result and enrolled in calligraphy instead, which was crucial
in creating fonts for the first Macintosh. His devotion to his work was unshakeable.
Together, he and his friend co-founded Apple, and even after being fired from the
business, he went on to start NeXT Software Inc., which Apple eventually bought out in
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1997, providing him the opportunity to return to the company. His poor health served as
additional motivation throughout his life.
After surviving a pancreatic operation made necessary by cancer, he saw it as a

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wake-up call to make the most of the time left to pursue his passions (Pea 2005). This
journey helped Steve Paul Jobs develop into a leader with a wide range of styles and
attributes.
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To begin with, Jobs was a charismatic boss. He was well known for his ability to
deliver engrossing presentations, a skill that served him well in his professional life. His
storytelling abilities helped him draw in his audience as well as his colleagues at Apple
and other businesses.
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By using metaphors and analogies, he was able to explain why using Apple items
was better than using other brands of products. His captivating personality was crucial
in creating passionate leaders who remained committed to accomplishing what many
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saw as impossibly difficult and persuading his clients that his business had the greatest
items on the market.
Jobs’ temperament and leadership style appeared to be defined by his innate

and acquired characteristics. This earned him a number of titles that mostly reflected
his obsession with perfection. As a result, his leadership style was regarded as
(c
individualized; occasionally, he had high expectations for his workers.

Jobs claimed that he was motivated by improving people, a leadership style that
Notes
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was occasionally viewed as authoritarian and impolite, especially in meetings. Even as
a role model, Jobs persisted on exercising absolute authority over others and telling
them what to do. Over a hundred workers directly reported to Steve Jobs while he was
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still at Apple. He was consequently a poor participatory leader. (Peña 2005).
Steve Jobs is still a symbol of transformational leadership, which is significant.
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Over the course of his career, Steve Jobs was able to change numerous organisations,
including Pixar. He also set an example for others to follow, demonstrating staff
members and other managers what needed to be done to face the challenges of a
cutthroat corporate environment. This was crucial in encouraging performance and
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bringing out the best in each employee.
1. After going through this case is it clear that leadership is a major concept in the
society.
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Summary
●● Strategic evaluation generally operates at two levels – strategic and operational
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level.
●● At the strategic level, managers try to examine the consistency of strategy with
environment.
●●
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At the operational level, the focus is on finding how a given strategy is effectively
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pursued by the organisation.
●● Strategic control is a type of “steering control”. We have to track the strategy as it
is being implemented, detect any problems or changes in the predictions made,
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and make necessary adjustments.

●● Operational control provides post-action evaluation and control over short periods.
They involve systematic evaluation of performance against predetermined
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objectives. Organisations use many techniques or mechanisms for strategic

control.
●● Some of the important mechanisms are management Information systems,
benchmarking, balanced scorecard, key factor rating, responsibility centres,
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network technique, Management by Objectives (MBO), Memorandum of

Understanding.
●● If the need for evaluation was recognised from the outset, then a strategic
evaluation will ideally take place before the project begins delivering activities.
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●● The purpose of evaluating causal connections between activities, outputs and

outcomes, is to explore whether or not the project’s assumptions about the likely
outcomes and effects of its activities and outputs are well-founded.
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●● There are three fundamental strategy evaluation activities, viz. reviewing

external and internal factors that are the bases for current strategies; measuring
performance and taking corrective actions.
(c
Glossary
●● Balanced Scorecard: Strategic performance management tool - a semi-standard
structured report supported by proven design methods and automation tools.
●● Benchmarking: Comparative method where a firm finds the best practices in an

Notes
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area and then attempts to bring its own performance in that area in line with the
best practice.
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●● Management by Objectives: Process of agreeing upon objectives within an
organisation so that management and employees agree to the objectives and
understand what they are in the organisation. Operational control: ensures that
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day-to-day actions are consistent with established plans and objectives.
●● Responsibility centre: A segment of a business or other organisation, in which
costs can be segregated, with the head of that segment being held accountable
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for expenses.
●● Strategic evaluation and control: Process of determining the effectiveness of
a given strategy in achieving the organisational objectives and taking corrective
actions wherever required.
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●● Strategic surveillance: Broad-based vigilance activity in all daily operations both
inside and outside the organisation.
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1. The execution of plans and strategies in order to achieve the organisation’s _____-
term goals is referred to as strategy implementation.
a. Short
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b. Medium
c. Long
d. nil
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2. Strategy Implementation is the ______stage of the Strategic Management process,

the other three being a determination of strategic mission, vision and objectives,
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environmental and organisational analysis, and formulating the strategy.

a. One
b. Two
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c. Fourth
d. fifth
3. The success of the company is significantly influenced by the strategy
implementation________.
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a. Process
b. Stage
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c. Sequence
d. line
4. Strategy implementation entails developing a _____and carrying it out inside the
organisation or team.
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a. Ploy
b. Programme
c. Perspective
Notes
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d. plan
5. The act of carrying out a plan to achieve the desired goal or collection of goals is
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known as strategy____________.
a. Implementation
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b. Evaluation
c. Assessing
d. Analysing
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6. Implementation concerns who, where, when, and how; the strategic plan addresses
what and why of ___________.
a. Act
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b. actions
c. Role play
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d. informational
7. Transparency and accountability promote ________.
a. Informational r
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b. transformation
c. Norms
d. Effects
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8. The ______crucial elements that must be present for implementation to succeed

are people, resources, structure, systems, and culture.
a. Four
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b. Six
c. Five
d. seven
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9. The ______step in putting individual plan into action is to confirm that the appropriate
individuals are on board.
a. First
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b. Two
c. Six
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d. ten
10. The _______of putting strategies and plans into practise in order to realise strategic
objectives and goals is known as implementation.
a. Process
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b. Scenario
c. Inspection

d. banking
Notes
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11. Setting _________enables a business to advance and make future plans.
a. Results
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b. Objective
c. Perspective
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d. Goals
12. Every role has a goal, which is typically outlined in the job _______.
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a. Description
b. analysis
c. Specification
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d. evaluation
13. A mission and vision that are clear and straightforward will aid the _______________
in cooperating for a common goal
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a. Planning
b. Organisation
c. Direction r
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d. Co-ordination
14. The management checks if the strategies used to accomplish organisational goals
and adhere to the strategic vision are effective in the ______step, which involves
reviewing and monitoring performance.
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a. Primary
b. Secondary
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c. Fifth
d. last
15. The practise of assigning and managing resources in a way that meets a company’s
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strategic planning objectives is known as resource_________.

a. Co-Ordination
b. Allocation
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c. Analysing
d. management
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16. The purpose of strategic controls is to guide the business in its ______-term strategic
orientation
a. Short
b. Long
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c. Mid
d. nil

17. A technique for managing a strategic plan’s execution is called strategic _______
Notes
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a. Control
b. Consequence
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c. Evaluating
d. demand
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18. Organisational control is the process of continuously allocating, assessing, and
controlling resources to achieve an organisation’s_________.
a. Role
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b. Objectives
c. Outcome
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d. affect
19. Effective leadership encourages people to collaborate closely at work and work
diligently to complete projects within the allotted _____frame.
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a. Time
b. Week
c. Month r
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d. age
20. A phrase used to describe particular_______ of behavior, including rituals, laws,
and identity within a workplace is “organisational culture.”
a. Plan
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b. Patterns
c. Design
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d. Observation
Exercise
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1. Why do managers install support systems in the organization? Explain with examples
how support systems help in successful implementation of strategy in organizations.
2. Critically examine the role of strategy supportive reward systems in strategy
implementation.
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3. Discuss the importance of strategy-supportive corporate culture in the implementation

of strategy.
4. Explain how strategy-supportive corporate culture facilitates better strategy
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implementation.
5. What are the importance of control in strategic planning?
6. What are the various types of strategic controls? Why should managers ensure that
financial and output controls are supplemented with behavioral controls?
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Learning Activities
Notes
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1. What is strategic change? Explain the change process proposed by Kurt Lewin that
can be useful in implementing strategies?
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2. What are the factors that need to be considered while designing strategy supportive
reward systems?
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1. c 2. c
3. a 4. d
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5. a 6. b
7. b 8. c
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9. a 10. a
11. d 12. a
13. b 14. c
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15. b 16. b
17. a 18. b
19. a 20. b r
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1. Galbraith, J. R. (1974). Organisation design: An information processing view.
Interfaces, 4, 28–36. Galbraith believes that “the greater the uncertainty
ni
of the task, the greater the amount of information that must be processed
between decision makers during the execution of the task to get a given level
of performance.” Firms can reduce uncertainty through better planning and
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coordination, often by rules, hierarchy, or goals. Galbraith states that “the

critical limiting factor of an organisational form is the ability to handle the non-
routine events that cannot be anticipated or planned for.”
2. Ghoshal S., and Moran, P. (1996). Bad for practice: A critique of the transaction
ity
cost theory. Academy of Management Review. 21(1), 13–47.

3. Greenspun, retrieved January 30, 2009, from Hershey profits for 4Q 1999
down 11% due to SAP implementation problem. http://www.greenspun.com/
bboard/q-and-a-fetch-msg.tcl?msg_id=002SUM.
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4. IN, retrieved January 30, 2009, from http://i.n.com.com/pdf/ne/2006/perkins_

letter.pdf HP Chairman Patricia Dunn defended this rather extreme form
of control as legal, but the amount of damage to the firm’s reputation from
)A
these charges led the firm to discontinue the practice. It also prompted the
resignation of several directors and corporate officers.Retrieved January 30,
2009, from http://news.zdnet.com/2100-9595_22-149452.html.
5. Kuratko, D. F., Ireland, R. D., and Hornsby. J. S. (2001). Improving
(c
firm performance through entrepreneurial actions: Acordia’s corporate

entrepreneurship strategy. Academy of Management Executive, 15(4), 60–71.

6. National Institute of Standards and Technology, retrieved January 30, 2009,

Notes
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from http://www.nist.gov/public_affairs/factsheet/baldfaqs.htm.
7. The Health Care Blog, Retrieved December 9, 2008, from http://www.
in
thehealthcareblog.com/the_health_care_blog/2007/12/pilots-use-chec.html.
8. U.S. Government Printing Office. (2006, February 15). Executive summary.
Select Bipartisan Committee to Investigate the Preparation for and Response
nl
to Hurricane Katrina.
9. Hitt and his associates provided this definition of strategic leadership. See, for
details, Hitts et el., op.cit. p. 489.
O
10. Intellectual capita refers to employees’ expertise, brainpower, innovation and
ideas.
11. See Hills and Jones, op.cit.
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12. Readers, for details of how process reengineering is done, may consult
Michael Hammer and James Champy, Reengineering the Corporation (New
York: HarperBusiness, 1993).
si
13. Judy Olian and Sara Rynes, “Making Total Quality Work: Aligning
Organizational Processes, Performance Measures, and Stakeholders,” Human
Resource Management, 30 (3), Fall 1991, p. 303.
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14. A. Thompson and A. J. Strickland, Strategic Management (New York: McGraw-
ve
Hill, 2001), pp. 402-405.
15. Strategic Management, A Dynamic Perspective - Concepts and Cases - Mason
A. Carpenter, Wm. Gerard Sanders, Prashant Salwan, Published by Dorling
ni
Kindersley (India) Pvt Ltd, Licensees of Pearson Education in South Asia.

16. Strategic Management and Competitive Advantage - Concepts - Jay B.
Barney, William S. Hesterly, Published by PHI Learning Private Limited, New
U
Delhi.
17. Globalization, Liberalization and Strategic Management - V. P. Michael.
18. Business Policy and Strategic Management - Sukul Lomash and P. K. Mishra,
ity
Vikas Publishing House Pvt. Ltd., New Delhi.

19. Strategic Management - Fred R. David, Published by Prentice Hall
International.
20. Business Policy and Strategic Management - Dr. Azhar Kazmi, Published by
m
Tata McGraw Hill Publications.

21. Strategic Management - Bern Banerjee.
)A
22. Business Policy and Strategic Management - Jauch Lawrence R & William
Glueck Published by Tata McGraw Hill.
23. Strategic Management - Thomas L. Wheelers & J David Hunger Addison,
Wesley publishers.
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24. Strategic Management - A Multi Perspective Approach, Edited by Mark Jenkins

& Veroruque Ambrosini Palgrave.

25. Strategic Management : Competitiveness & Globalisation - Michael Hilt and R.

Notes
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Duane Ireland, Robert E. Hoskisson South, Published by Western Thomson
Learning.
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26. Strategic Management - John A. Pearce II & Richard B. Robinson Jr. A.I.T.B.S.,
Delhi.
27. Business Policy and Strategy - Concepts & Readings - Daniel McCarthy,
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Robert Minichiello, Joseph Curran, Published by All India Traveller Bookseller.
28. Public Enterprise Management and Privatisation - Laxmi Narain Published by
S. Chand & Company Ltd, New Delhi.
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29. Business Organisation - Rajendra P. Maheshwari, J. P. Mahajan, Published by
International Book House Pvt Ltd.
30. Disaster Management Strategies - A Global Perspective - Deolankar Vivek,
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Published by Commonwealth Publishers, New Delhi.
31. Disasters and Development - Cuny Fred C. Published by Oxford University
Press, Oxford
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Module - V: Strategic Change, Innovation and

Notes
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Entrepreneurship
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●● Concept of Change Management in Organisation
●● Types of Change
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●● Managing Strategic Change
●● Theories of Planned Change in Organisation
●● Managing Resistance to Change
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●● Role of Technology in Strategic Development
●● Role of Innovation in Strategic Development
●● Concept of Entrepreneurial Ventures
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●● Strategic Issues in Entrepreneurship Ventures
●● Dealing with Strategic Challenges in Organization
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5.1 Managing Strategic Change and Innovation
Introduction
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Figure: Innovation through better Change and Management

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Source: https://www.retailtouchpoints.com/wp-content/uploads/2015/03/8de6004c
909fccfeb4b81292b6fefce1.jpg

Discontinuous, continuous, and dynamically continuous innovations are only a few

Notes
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of the numerous shapes that creativity can take. In the paragraph that follows, we’ll go
over what they all mean.
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It is sufficient to say that without innovation, businesses cannot advance along
the value chain, and without advancement along the value chain, they cannot maintain
their competitiveness. Therefore, businesses need to innovate regularly if they want to
nl
change their organisational procedures and their strategy.
●● Innovation has the potential to result in abrupt and significant changes to how
businesses operate and how customers interact with new products and services.
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This type of invention, known as a discontinuous innovation, is sudden and has a
significant impact on how the company conducts business.
●● On the other side, innovation can also be gradual and incremental. In this case,
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the company provides improvements to its products so that customers can
gradually acclimate to them.
●● Finally, there is dynamically constant innovation, which influences how the
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business responds to shifting market conditions and trends in consumer behaviour
to have a positive effect on the psychology of the consumer.
The point here is that no matter what kind of innovation the company adopts, the
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prerequisite for change management is innovation and without innovation, a company
cannot expect its internal and external environment to be to its advantage.
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For instance:
◌◌ Discontinuous innovation is when a company like Apple releases a new
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iPhone and alters how consumers view a phone.

◌◌ If Apple changes the iPhone in response to shifting customer preferences, that
is dynamic continuous innovation.
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◌◌ If it updates the iPhone and then releases it, that is continual innovation.
Apple must constantly innovate in order to stay ahead of consumer trends and the
competition if it is to leave its stamp on the customer experience.
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The 3M Corporation is an illustration of a business that consistently seeks to be

the best in terms of change and innovation. This corporation is renowned for its top-
notch innovation teams, which drive change across the organisation, keep customers
satisfied, and keep rivals on their toes.
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In fact, 3M’s approach to driving innovation to bring about change is excellent

and deserving of imitation. Therefore, innovation need to be the guiding principle for
businesses looking to alter their internal environments and, as a result, alter how they
)A
present themselves to the outside world.

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Notes
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Figure: Change Management
Source: data: image/jpeg; base64,/9j/4AAQSkZJRgABAQAAAQABAAD/
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5.1.1 Concept of Change Management in Organisation
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The only thing that is constant in life, so the saying goes, is change. This assertion
is accurate for both commercial organisations. Almost often, both internal and external
variables influence how things unfold. Smoothly implementing these adjustments is
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one of managers’ most crucial responsibilities. This procedure is referred to as change

management.
Change Management
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The only thing that is constant in life, so the saying goes, is change. This assertion
is accurate for both commercial organisations. Almost often, both internal and external
variables influence how things unfold. Smoothly implementing these adjustments is
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one of managers’ most crucial responsibilities. This procedure is referred to as change

management.
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Management of these circumstances is essential since an organization’s

Notes
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performance depends on how well it adapts to change. Change management is useful
in this situation. Since modifications can occasionally only be avoided, this is not always
possible. Changes may, however, be prepared for and overcame. The management
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must make every effort to ensure that changes go smoothly. Neither the organisation
nor its members should find the changes to be too radical.
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Meaning of Change
Change is really just a deviation from the norm. People become habituated to
specific methods whenever they accomplish a task in them. They create strategies that
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they may use frequently to complete these jobs. Any modification to these techniques
only represents change. Changes might be reactive or natural. Natural changes
typically take place frequently during normal corporate operations. For instance,
changes in management style are a result of an organization’s growth.
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Reactive changes, on the other hand, are a response to the environment or the
organization’s policies. Workers must adjust to new technology, for instance, whenever
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a company uses them in production.
Management of Change
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Every effective manager must have the ability to foresee expected developments.
In addition, he must to be able to seamlessly restructure the organisation to
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accommodate these changes. In a nutshell, this is what change management is all
about. Change is always a given; it can never be entirely avoided. Managers have
two options: they either wait for things to happen or they can foresee them and take
action beforehand. The latter is what a good manager will always do. In general, this
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procedure necessitates a detailed comprehension of the variables that influence

changes. This is due to the fact that only internal and exterior forces can induce
changes.
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Causes of Change
Changes affecting an organisation are basically the result of its environment. Both,
external as well as internal factors play a huge role here. Hence, managers need to
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understand all types of changes possible under these two classifications.
External Factors
These factors always lie outside an organisation. Neither the organisation itself nor
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its members are responsible for them. However, they always feel the effect of these
factors. Some of these factors include:
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◌◌ Economic factors: Market demand, resource availability, rivalry, inflation,

interest rates, etc.
◌◌ Technology: An organisation must always adapt as technology advances.
Consider the discovery of fresh production techniques.
◌◌ Politics: A government’s policies frequently shift. Every term, even the
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government itself changes. The external environment is greatly influenced by

these variables.

◌◌ Additional elements: Every company organisation is impacted by additional

Notes
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factors such as urbanisation, education, cultural shifts, social mentality
changes, etc.
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Internal Factors
Internal modifications can occasionally take place as well. These alterations are the
result of a group and its members. For instance, a company’s top management can
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decide to diversify its industry. The company’s operations will change in a number of
ways as a result of this choice. Similar to this, other internal factors include:
◌◌ Personnel changes as a result of hiring, firing, retirement, promotion, etc.
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◌◌ Modification of operational policy choices such as paid time off, holidays, and
work schedules.
◌◌ Modifications to physical facilities, such as the use of new machinery or the
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use of alternative raw materials.
Change is something that business organisations must deal with frequently today.
Organizations must modernise and change their business vision, job functions, and
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even their overall aims in reaction to external market drivers and disruptors.
Priorities are addressed and redistributed as organisations reorganise their

workforce to match new objectives, with some employees taking on new duties. For
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managers hoping to guarantee all forms of transitions stay as seamless as possible,
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developing a consistent organisational strategy to change has become increasingly
crucial as a result of their staff having to deal with such a diversity of change. Change
management is useful in this situation.
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Figure: Causes and Types of Change

Source: https://tutor2u-assets.ams3.digitaloceanspaces.com/transforms/
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s3business/diagrams/840081/bus-change-causes-summary_2558ca17cfd574efc5
53cd677b3d659b.jpg
Change Management Defined

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Why it is necessary to manage change, and what is change management? The

process of monitoring and assisting change at whatever level where it occurs is known
as “change management.” Management teams must establish exactly how this change

will be handled, develop the methodology, and determine how to implement it most
Notes
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effectively.
The BNET Business Dictionary defines change management as “the coordination
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of a structured period of transition from situation A to situation B in order to achieve
lasting change within an organisation.” Similarly, the Change Management Learning
Center defines change management as “the process, tools, and techniques to manage
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the people-side of business change to achieve the required business outcome,
and to realize that business change effectively within the social infrastructure of the
workplace.”
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What are the Benefits of Change Management?
Basic Principles of Successful Change Management

Change management is planning for when change occurs, not a reaction to it if
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it does. Individuals can examine their own situations and the reasons why change is
necessary, coordinate their own efforts and resources, and manage the change itself
through the use of change management.
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Individuals have a much better chance of seeing outcomes from their individual
efforts by coordinating and structuring change as a process to be managed. Instead of
reacting and merely surviving it—or, worse yet, seeing no outcomes from the change
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efforts—change management should guide individual people, teams, departments, and
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organisations toward thriving and benefiting from it.
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Figure: Change Management Principles

Source: https://www.productplan.com/glossary/change-management-principles/

While the change management process can be different depending on the industry
Notes
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and applied in different ways based on the department versus organisational levels,
rolling out change management in a “proper way” tends to follow a few basic principles.
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1. Create a Climate for Change
The first step for every organisation confronting change is to foster a change-
friendly environment. Change can be intimidating or even frustrating, so it’s crucial
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for management to reduce resistance by explaining its significance, directing the
teams where the change will take place, and offering a clear vision to kick-start the
transition process. Gaining the trust and support of employees for change requires
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open communication on the “why” and “how” of the change. Employees can then take
ownership of the change and make it happen.
2. Engage and Enable Change
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The next phase is to involve and give the organisation the tools it needs to
implement change once the environment is suitable for it. Setting up responsibilities is
crucial when change is needed. Is a team or a specific person required to accomplish
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this change? Is it an organisational change that needs to be implemented on several
levels? If so, who will be in charge of organising these many levels? The transformation
process can be guided and accountability ambiguities can be lessened by having
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the answers to each of these questions. Maintaining open, transparent, and clear
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communication is crucial for this reason. Additionally, achieving quick victories can keep
motivation and enthusiasm high.
3. Implement and Sustain Change

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It is now time to implement and sustain the change with the organisation on board
with people, teams, and organisations empowered and motivated. To get the desired
result at this moment, it’s critical to remain concentrated and under pressure. Even
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though this phase can appear simple, some managers have a tendency to become
distracted or “ease up” in the middle of it. If the target goal changes during the change
process, don’t be afraid to modify accordingly by changing duties or processes to
maintain the drive and concentration. The organisation must move from a state of
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flux to one of permanence once the change has been implemented and the project is
finished in order to maintain the new status quo.
4. Review and Reflect on Change

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With the general principles in place, one final step in the change management
process is a review. Despite the best efforts of management personnel to communicate
effectively and properly assign responsibilities, change is a dynamic process. After
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completing a period of transition, it is important to review the aspects of individual

process that did, or did not, work effectively, then learn from the results.
Individuals are better prepared for the future by reflecting on the results. Having
examples of past practises that were most helpful to a particular organisation can be
helpful when that organisation faces change in the future. Any new changes can be
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treated with confidence, rather than fear or dread, as beneficial possibilities for the
organisation with a change management team that has already identified any prior
mistakes and learnt from them.
5.1.2 Types of Change

Notes
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The idea of “change” is not just a facet of life in today’s slow-paced world; it is
also crucial to surviving. Understanding the definition of change management helps to
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reduce the likelihood of sliding if an individual falls behind in updating skills because
developments and goals within an organisation change so frequently.
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Organisational Change Management – Definition!
According to the definition of organisational change management, a change in a
business process has the potential to have a big influence on the entire organisation.
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The organisation may undergo change as a result of a number of reasons, such as
company goals, service operations, and other facets. The major goals of organisational
change management are to increase corporate sales and increase staff productivity.
In the end, change management assists the staff in adjusting to and implementing the
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change in their regular work.
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Figure: What is Change Management

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Source: https://semoscloud.com/wp-content/uploads/2021/07/change-
management-definition.png
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Figure: Managing change in organisations

Source: https://slideplayer.com/slide/15118636/91/images/4/
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Definition+of+key+terms.jpg
Why Organisational Change Management Matters?

In the current environment, organisational change management is a requirement

Notes
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for any corporation. Occasionally, new personnel are hired and a few depart the
company. As the business expands, new departments are created, and new technology
and business techniques are gradually embraced to keep up in the modern business
in
environment. All employees should be informed about the change and how it will
affect them if the change management process is to be completed successfully in an
organisation.
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Types of Organisational Change Management
Before individual develop any change management plan, determine the type
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of change plan individual wish to have that yields the best possible results. Here is a
diagram showing the types of organisational change strategies that companies follow:
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Figure: Types of Organisational Change Strategies

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Source: https://www.invensislearning.com/blog/wp-content/uploads/2021/01/
Types-of-organisational-change-strategies.png
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Strategic Transformational Change

Minor adjustments to the current organisational policies would only have a limited
impact on the organization’s operations. On the other hand, the adoption of significant
change may change how an organisation operates. It takes some careful planning
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to create an effective plan that will help you reach your objective. Depending on the
change techniques put out, the final transformation may be successful or abject.
Personnel Change
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When organisations experience layoffs, personnel changes may occur. The idea
of layoffs has made the employees fearful and uneasy. From the perspective of the
organisation, the organisation needs to advance toward growth and inspire the staff
to persevere through the challenging times. Indeed, adding new personnel indicates
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expansion, which leaves the company open to change. When you hire new employees,
you must also train them to meet your organization’s needs. If this transition is not
managed properly, it may result in inefficiencies and impede future organisational growth.
Remedial Change
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When an organization’s bad performance needs to be addressed, the idea of
remedial reform is born. Individuals can tailor corrective modifications as they encounter
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problems, and adopting effective change management techniques would increase
effectiveness.
People-centric Organisational Change
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People-centric changes mainly focus on hiring new employees or implementing
new policies for employees. These changes are mainly prone to emotional responses.
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The organisation should take up the responsibility of preparing the employees for this
emotional transition phase and guide the team accordingly.
Organisational Wide Change
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Organizational-wide change refers to extensive transformation that impacts all
organisational policies. This modification shows how a lengthy-in-existence policy
has gotten out of date. Such significant alterations are simple to spot for employees.
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A thorough planning approach and ongoing communication are necessary to achieve
major changes. The change’s outcome will depend on the tactics used and how they
are carried out by each individual.
Unplanned Change
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It’s difficult to predict unplanned changes within the organisation and individual
need to handle in a systematized way. In case of any security breach or disruption or
chaos, implementing unplanned changes can minimize the chances of unplanned risks.
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5.1.3 Managing Strategic Change

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Figure: Management of Strategic Change

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Source: https://www.civilserviceindia.com/subject/Management/notes/images/
extent-chamge.png

Perhaps the only constant that business professionals can count on in today’s
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fast-paced, dynamic business environments is change. Organizations need to be agile
and willing to act quickly, and those that can do this will typically experience a lot of
change quickly. This change could affect the entire organisation or just a specific team,
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and it could be caused by a variety of things, including technology, internal operational
demands, money, politics, and technology.
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Even while change is frequently a good thing, many people find it unsettling or
even frightening. When told about impending changes, many employees automatically
assume the worst: they will lose their jobs, get new managers, have their teams
reorganised, be laid off as a whole, or receive lower pay or benefits. In order to
O
effectively manage organisational change, a leader must set the tone for their team
and mentally prepare themselves for it. They must also assist their subordinates in
comprehending and navigating the change as best they can. This is not an easy
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undertaking, especially when people may not have all the knowledge they need or may
feel conflicted about the changes the organisation is going through.
Having said that, a crucial part of leadership is developing the ability to handle
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organisational change. Here are some of the most important organisational change
management tactics you may use if you’re dealing with changes in your firm and want
to learn more about the change management process. Although there are various ways
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that leaders can handle change, some of the more effective methods involve planning,
openness and honesty, communication, and employee involvement. Below, we go into
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more detail about these and a few more crucial change management techniques.
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Figure: Change Management Strategies

Source: https://s3-us-east-2.amazonaws.com/maryville/wp-content/
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Change-Management-Guide-for-Developing-Innovators-Leaders-miniIG1-v3.jpg
Managing Change in Organisations
1. Plan Carefully
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Make sure you have a clear plan in place that at the very least addresses the
when, how, and why of the planned change before you present it to your team.
A thoroughly developed timeline, solutions to any concerns, and a list of new or
altered responsibilities for everyone involved are all things that should have been
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documented in order to bring someone to where they want to go.
2. Be as Transparent as Possible
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Organizational change can be challenging since it frequently happens in stages or
requires some level of discretion from the management group or specific individuals.
However, it’s important to be as open and honest as you can with each employee,
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especially when the change will be significant. Even if you can’t share all the
information with them, being honest about the pieces you can (and clearly outlining
their impact) will go a long way toward making each employee feel more at ease.
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3. Tell the Truth
It is simple to adhere to this guideline when the change in question is favourable;
nevertheless, it can be challenging to do so when the change is a reaction to difficult
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circumstances or will have immediate negative effects. However, being as open
and honest as you can with each employee is usually the best course of action.
Sugarcoating, portraying situations in an overly hopeful light, and making unrealistic
results promises will only make each employee’s employees doubt your intentions.
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While it’s crucial for managers to put up an upbeat face to their teams, do so while
also being aware of any potential obstacles and disadvantages.
4. Communicate
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Keep the lines of communication open between individual and individual employees.
Take the time to explain why the change is happening, and what it will look like in
practice. Make individual self open to questions, hold team meetings, and invite
individual reports to come see individual and talk through their concerns or thoughts
in a neutral atmosphere.
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5. Create a Roadmap
Educate each employee on the current state, past history, and future plans of the
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company. How does the change fit within the company’s past, and how will it affect
the future? It will be easier for personnel to understand how the change fits into or
departs from the business model they have grown accustomed to if this information
is presented properly, demonstrating the thought and strategy behind the change.
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6. Provide Training
Provide each employee with the necessary training to assist them become
proficient in the new way of doing things whether the change entails modifications
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to technologies or business processes. Additionally, make sure that person

emphasises that this training will be accessible when the change is revealed to
prevent employees from worrying that they won’t be able to keep up due to a lack of
knowledge or experience.
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7. Invite Participation
Giving employees the chance to contribute to or provide feedback on decisions
can be a particularly effective tactic, even though this won’t always be available.
Employees will be appreciative of the opportunity to have their opinions heard, and
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it may also be a terrific way to learn about various viewpoints and the effects that
one might not have otherwise considered.

8. Don’t Expect to Implement Change Overnight

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Almost often, a slower, more deliberate rollout is preferable to a quick direction
change. Employees will not only have time to get used to the change, but they will
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also have the opportunity to ask questions and address any concerns before the
change is implemented. Additionally, as it takes time for individuals to form new
habits, this will allow individual staff members to become accustomed to the new
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procedure and progressively phase out the outdated one.
9. Monitor and Measure
In order to ensure that things run well and that the individual will ultimately succeed, it
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is crucial to retain constant control over implementation and rollout once the change
process has begun. Keep a close eye out for prospective issues, and deal with
them as soon as they arise. Establish success measures and keep track of them
to ensure that the person is on the right road. Continually check in with important
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stakeholders to understand their perspectives and receive any pertinent comments.
10. Demonstrate Strong Leadership
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Above all, keep in mind to return to the fundamentals and concentrate on upholding
and demonstrating the traits of a great leader. Encourage each member of the team,
show that you can think strategically, are open-minded and adaptable, and that
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you have the team’s best interests at heart. No matter how difficult they may be, a
strong leader can assist their team navigate the waves of change with assurance
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and clarity.
11. Building Organisational Change Strategies
Strong leadership requires a manager to have a bank of change management
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techniques at their disposal at all times. While certain change management abilities
can be acquired through practical application, returning to school to get a degree in
the subject is one of the greatest methods to build this skill set. Numerous degrees
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and certificates are offered in related fields; a certificate in positive organisation

development, for instance, will put a lot of emphasis on change management.
Consider a master’s in leadership or an MBA programme with a leadership focus if
you want a broader education that will help you develop other high-level abilities in
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addition to change management.s
5.1.4 Theories of Planned Change in Organisational
Theories of Planned Change in Organisational Development

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There are three significant organisation development and change cummings

theories used to help the organisational members manage the change.
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1. Lewin’s Organisation development and change model

Lewin’s model is the basis for comprehending organisational change. It was first
developed by Kurth Lewin and had three steps in it.
So, Lewin’s change model suggests increasing the factors that trigger a change
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in the organisation while reducing the forces that preserve the existing status of the
organisation. This reduces the resistance to change.

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Source: https://www.geektonight.com/wp-content/uploads/2019/09/Lewins-
Change-Model.jpg
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Image : Lewins Change Model
The three steps involved in this model include:

◌◌
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Unfreezing: As the name implies, this process entails minimising the elements
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that keep the current organisational behaviour at its level. Since the current
condition is no longer frozen, the phenomenon is known as unfreezing. The
causes of psychological disconfirmation might occasionally help people
unfreeze.
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◌◌ Moving: In this step, an individual or department is moved to a different level

from their current organisational culture or innovation strategy. Additionally, it
entails tampering with the current system to provide fresh perspectives and
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necessary organisational changes.

◌◌ Refreezing: At this stage, the organisational balance is stabilised. Refreezing
is accomplished via supporting processes and practises, which forces the new
organisational state.
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These are the forces that gradually become regular, and the cycle continues.
2. Action Research Organisation development and change model

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The action research approach concentrates on the planned change as a cycle

since planned change in organisational growth is a cycle. The organization’s primary
research provides knowledge to direct future action. The amount of information
provided is used to evaluate the outcomes.
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The goal of action research is to help businesses implement their planned change.
Additionally, it aids in the development of broader knowledge obtained by implementing
the intended change, allowing it to be applied to other businesses.
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Image: Action Research Model

Source: https://www.geektonight.com/wp-content/uploads/2019/09/Action-
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Research-Model-768x768.jpg
3. Positive Model
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The positive model focuses on what the organization is doing right. It helps
members understand their organization when it is working at its best and builds off
those capabilities to achieve even better results.
The positive model focuses on what the organization is doing right. It helps
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members understand their organization when it is working at its best and builds off
those capabilities to achieve even better results.
5 Stages of Positive Model are:

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1. Initiate the Inquiry

2. Inquire into Best Practices
3. Discover the Themes
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4. Envision a Preferred Future

5. Design and Deliver Ways to Create the Future

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Image: Positive Model
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Source: https://www.geektonight.com/wp-content/uploads/2019/09/Positive-
Model-768x656.jpg
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5.1.5 Managing Resistance to change
Simply said, change may be frightening and challenging. Most people would rather
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stay in their own routines and environments than explore new ones. Organizational
transformation presents its own set of difficulties. The decision to make changes in
one’s personal life and the acceptance of top-down change in the job are extremely
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different. Employees’ lack of choice results in resistance to organisational change,

which causes them to feel insecure and out of control.
Workplace resistance to change can take many different forms. Attendance issues,
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missed deadlines, broken promises, and a general air of indifference are all signs
that an organization’s members are not fully involved. Organizational leaders must
determine the areas where resistance is most likely to arise and create a strategy to
stop it in order to address these issues. In doing so, several tactics have been shown to
be successful in assisting organisations in overcoming counterproductive opposition to
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change.
1. Listen to Employee Concerns

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Communication is the initial tactic in overcoming resistance to organisational

change. Most business owners and leaders are already aware of how important
communication is. However, consider allowing the company’s staff start the
conversation. People want to have their opinions heard, and allowing them to do so
can help reduce their feelings of irritation and uncertainty.
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Individual change initiatives and the underlying emotion will benefit greatly from
the input of specific employees’ opinions, worries, and suggestions. At the absolute

least, having a solid understanding of each employee’s viewpoint will enable each
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person to comprehend the rationale behind that employee’s reluctance to change.
2. Define and Communicate Reasons for Change
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Defining the what, why, and how of the change and explaining it to employees
is the next tactic to overcome resistance to change. Leaders need to create a
communication plan that goes beyond simply informing staff members of their
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responsibilities. By concentrating on what people care about and need to know, this
strategy should segment and target each department’s or employee’s audience.
Nearly one-third of employees don’t comprehend why changes are taking place,
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according to U.S. trends in employee engagement. This emphasises how crucial
it is to communicate both the aim and the justification for change. It is important to
emphasise the reasons why change will ultimately be advantageous to employees
while doing this.
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3. Build Excitement
The amount of resistance that develops in the workplace is greatly influenced by
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how individuals communicate planned change. Leaders who communicate the need
for change with passion and fervour have the potential to spread their commitment to
others. The organisation can then develop an overall atmosphere of transformation
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that is exciting and upbeat. On the other hand, any anxiety might thwart and prevent
positive change.
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4. Prioritize Employees
It’s critical to give individual employees’ interests and incentives top priority because
change can only happen if every team member is on board. If someone is adopting
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a new process or workflow, they should plan their project from the standpoint of
employee acceptance rather than putting too much emphasis on the system itself.
Don’t focus just on the capabilities of the new approach. Instead, consider the things
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that staff members can accomplish with the aid of this new process. Alignment
and putting employees first lay the groundwork for trust, which is essential for
organisational change.
5. Delegate Change
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Fighting resistance with culture is a potent top-down tactic. A company culture created
by inspirational leaders makes overcoming opposition an essential component of
change management rather than a distinct corporate activity. Start with developing
team members that are already in the organisation and are natural leaders. They
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will act as powerful role models for the remaining staff, which will have a significant
impact on the company.
6. Leverage Data
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While workplace opposition to change is frequently an emotional reaction, it can

be useful to use rational facts and evidence as a backup tactic. Encourage each
employee to view the statistics on their own. This is a powerful method to both
express openness and the need for change.
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7. Implement Change in Phases

Any kind of change at work takes time to take place. There has been a lot of planning

done in advance of the move, and staff members at all levels are very excited and
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involved. Employees can accept new working practises gradually by implementing
change in stages.
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As opposed to a radical change in course, a longer, more deliberate rollout is
nearly always the preferred option. Gradual rollout allows leaders the opportunity
to address any concerns and queries well in advance, in addition to allowing staff
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members to acclimatise to the change.
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Image: Strategies for managing resistance to change
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Source: http://blog.emergentconsultants.com/wp-content/uploads/2011/04/
image11.jpg
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5.1.6 Role of Technology in Strategic Development

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Figure: https://technofaq.org/wp-content/uploads/2019/04/technology-
development-strategies-620x350.jpg
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Source: https://technofaq.org/wp-content/uploads/2019/04/technology-
development-strategies-620x350.jpg

The design of the Information systems architecture and acquisition of technology

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are important aspects of an entity business strategy. Choice regarding technology can
be critical to achieving entity objectives. Technology decisions should be a input to the
strategy process helping to define innovations and seeking to increase revenue rather
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than merely an after the fact too for achieving goals.
A. Common principles of Technology Driven strategy development
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1. In the same way as customers, markets, and competitors, technology is a crucial
component in the development of strategy.
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2. Strategy development must be a continuous process rather than something that is
refreshed every three to five years due to the speed at which technology is changing.
3. Emerging business opportunities that are innovative must be managed separately
and in a different way than basic operations.
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4. Managers and executives need to be honest about the fact that technology has the
potential to challenge ingrained company beliefs.
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5. Technology management needs to be done from two angles.
I) Its capacity to spur innovation in already established industries, and ii) the
capacity of developing technologies to open up new markets and product
opportunities. r
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6. Priorities for the customer should take precedence above internal efficiencies.
B. Information and Communication Technology’s Role

1. Technology is essential in enabling the flow of information inside an organisation,
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particularly information directly related to risk management for businesses across

strategy formulation and the entire organisation. The decision to use a particular
technology to assist an organization’s enterprise risk management often reflects the
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A. The sophistication of the entity approach to enterprise risk management.

Types of occurrences that the entity is affected by, B.
C. The information technology architecture of the entire entity, and D. The degree
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of centralised support technology.

2. An organisation can identify, assess, and respond to risk thanks to a variety of
critical components that make up enterprise risk management. To achieve goals, it
is essential to monitor risk using information systems and control operations.
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A method of information management While some organisations have

interconnected systems, others manage information individually by unit of
function. More businesses are going toward integrated systems that can share
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information across the organisation as enterprise resource planning systems

develop.
B. Data accessibility and utility Some organisations have improved their
technological architectures to provide better connectivity and data usability
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with rising internet usage. Real-time information gathering, maintenance, and

distribution across units and functions are made possible by web services-
based information strategies, often improving information.

C. Events of Different Types Affecting the Entity Event identification is essential

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to risk management in businesses. Events could turn out badly or favourably
(representing opportunities). Strategies that take advantage of possibilities
and reduce risks are what guide the choice of information technology system
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and method.
D. Information technology architecture There are many different ways to
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organise technology resources for the sake of achieving organisational goals.
Technology architecture is the basic term used to describe this resource
organisation.
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i. Customized Systems: Some Companies develop customized systems
for handling information systems requirements. Customized Systems are
often characterized by data warehouse to support the entity management.
ii. Open Architecture: Open architectures utilize such technologies such as
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XBRL, XML, and web services to facilitate data aggregation, transfer and
connectivity among multiple systems.
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5.1.7 Role of Innovation in Strategic Development
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Figure: Innovation Strategy

Source: https://www.viima.com/hs-fs/hubfs/Blog_Images/Used/KPIs%20-%20
How%20to%20measure%20Innovation/The%20strategy%20choice%20cascade.
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png?width=1395&name=The%20strategy%20choice%20cascade.png

A rising number of businesses understand the importance of innovative planning

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and actively pursue it. This is a result of the expanding rivalry; to survive and succeed
in the market, an individual must constantly seek out and offer innovations as well as
foresee and plan potential changes. At least 84% of executives, according to McKinsey,
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think that innovation is crucial to their growth plan. The key to innovation success
is the selection of a type and the development of a strategy. A specific order for the
selection and use of an innovative strategy—from setting goals to actually putting it
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into practice—is provided by the design of innovative transformations. Today we’ll talk
about the development of this stage of innovation, but first, let’s figure out what the term
‘innovation strategy’ implies?
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A set of goals and objectives, rules for making decisions, and methods for
moving a business from one state to another based on the introduction of innovations
(technological, product, organisational, managerial, economic, social) and positioning
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the business in competitive markets for goods and services are all parts of an
innovative development strategy. Three conditional groups can be formed by combining
the entire range of inventive strategies:
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Offensive: aiming at creating fresh technology approaches to enacting a market
penetration or diversification expansion plan. Such an innovative strategy is typical
of businesses that operate under the tenets of entrepreneurial competition. Both the
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danger and potential reward are high. In order to quickly incorporate scientific and
technological advancements into products or services, leaders of a certain classification
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must be able to communicate new market opportunities and changes. Most of the time,
a concentration on research is necessary, along with the use of new technology.
Companies that use it: technology startups: Uber, Spotify

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Defense: works to keep the company competitive in its current markets. Such a
strategy’s primary goal is to get the cost-benefit analysis going during the innovation
phase. This kind of innovation strategy also entails considerable risk and is appropriate
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for businesses that can prosper in a cutthroat market. To achieve this, an individual
must capture a sizable portion of the market and preserve a profit margin through low
production costs. The experience of huge corporations demonstrates that businesses
with strong positions in production and marketing can expect success. In order to
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promptly respond to advancements made by a rival, it is vital to have a strong scientific

and technological foundation.
Companies that use it: medium and large technology companies: Google, Apple
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Businesses with strong market and technology positions utilise imitation tactics.
Companies who didn’t lead the market introduction of specific innovations adopt the
copycat strategy. Simultaneously, the fundamental consumer characteristics (but not
always the technical qualities) of inventions introduced to the market by small inventive
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enterprises or dominant firms are imitated. An alternative is to buy a new technology

from someone else, for instance by purchasing licences. Compared to its own research
and inventions, a licence can be obtained for a lot less money, more quickly, and
with more reliability. This is a fairly effective tactic, but in order to modify the original
and establish a monopoly situation inventiveness, high specialised credentials and
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relentless maintenance of the obtained level are required.

Companies that use it: companies with strong market positions: Samsung, Sony,
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Xiaomi
The types of strategies are shown in more detail in the image below:
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It is important to note that innovation activity in the information era is heavily
centred on digital technologies, their development processes, and methods of
implementation. A strong foundation in technology and software development is
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necessary for the study of digital innovation, as is an awareness of innovation
management and business procedures. When beginning the construction of an original
approach, this fact should be taken into consideration.
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Let’s proceed directly to the steps to develop and implement an innovative strategy.
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Image: Innovation Strategy

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Source: https://www.viima.com/hs-fs/hubfs/Choice%20process.
png?width=500&name=Choice%20process.png
1. Define goals and strategic approach to innovation

Finding out exactly what people are aiming for is the first stage in the process of
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building an inventive strategy. In other words, individual need to conduct analytical

work, assess the current state of affairs in individual company, and then clearly state
the innovative goals and directions of individual innovative strategy.

Define: What do people hope to accomplish through innovation? Consider your own
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long-term business objectives and any actions that could boost your business over
the long term.
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2. Know Individual Market: Explore Customers and Competitors
Studying the target market and the target audience segment for each product or
service is the second step in developing an innovative approach. Individuals must
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comprehend what specific clients genuinely want and eliminate any extraneous
factors in order to properly innovate and suit their wants. To be able to achieve this,
it’s critical to have a thorough understanding of the market’s dynamics and trends.
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It is not advised to completely imitate the plan that worked for the other player on
the individual field because competition needs are unique and frequently extremely
specialised. Instead, it makes sense to absorb important lessons.
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3. Determine the value of individual offer
The next and probably the most important step is to determine what makes individual
offer unique and valuable. How exactly are individual going to win? What innovations
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will allow the company to use this value and achieve a competitive advantage?
Since the aim of innovation is to gain a competitive advantage, one should
concentrate on adding value that either saves one’s customers money and time, or
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encourages them to pay more for one’s offer, offers greater social benefits, or makes
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one’s product more effective, more convenient to use, or more durable and more
reasonably priced than the competition. An individual needs to have the capacity
to recognise and exploit fresh untapped markets in order to develop a distinctive
value proposition. The achievement of advantage is made possible by the fact that
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competition is irrelevant. Individuals just need to differentiate and cut costs when
adapting already-existing goods or services to prosper.
4. Create individual own innovative methods and systems
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Individuals must determine what creative systems and methods they require in
order to be able to tie the components of the innovation infrastructure together in
order to be able to implement their innovative strategy in a scalable and integrated
way. What will be the most crucial systems for implementing an innovation plan and
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aiding in its evaluation?

Innovation systems are “a network of organisations in the public and commercial
sectors whose activities and interactions generate, import, modify, and spread
innovative technologies,” according to British economist Christopher Freeman.
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They include the following elements:

◌◌ The role of R&D companies, especially regarding technology
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◌◌ The role of education and training related to innovation

◌◌ Conglomerate structure of industry
◌◌ Production, marketing and finance systems.
Use the above and then no competitors will fright individual.
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5. Implement individual strategy

It is time to put individual inventive strategy into practise after deciding on a personal

approach to innovation and weighing all of its key components. Focus on individual
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objectives and diligently carry out individual innovation strategies to maintain
innovation as a strategic priority. At this point, it is advisable to start working on
technology solutions, which will eventually serve as the major strength of each
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individual’s inventive strategy, but take your time:
The direction of action will be shaped by individual strategic long-term goals, which
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will also encourage individual inventive work. The only sure method to accomplish
this is to set boundaries and concentrate on the main objective. The capacity to
customise each particular solution should also be a key consideration because it will
provide you more freedom to adopt creative tactics.
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5.2 Entrepreneurship
●● Concept of Entrepreneurial Ventures
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●● Strategic Issues in Entrepreneurship Ventures
●● Dealing with Strategic Challenges in Organisation
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Introduction
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Figure: Business Strategy Innovation and Strategic

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Source:https://slidetodoc.com/presentation_image_h/7ce4daf086033cb9e1006dc1
51daf033/image-33.jpg
The process of discovering opportunities, gathering the resources required to take

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advantage of the chances, and launching a new business with the goal of satisfying
consumer needs and turning a profit is known as entrepreneurship. The French
term “entreprendre,” which means “to undertake,” is the root of the English word
“entrepreneurship.” An entrepreneur is a person who engages in entrepreneurship.
Although it happens everywhere, free-market economies are particularly known for their
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high levels of entrepreneurship. The United States, Canada, Israel, Italy, and the United
Kingdom have the greatest rates of entrepreneurship.

Since new businesses fail at a relatively high rate, entrepreneurship entails

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significant risk. An entrepreneur must therefore be able to cope with danger and
uncertainty and even thrive in them in order to be successful. Along with innovation
and creativity, successful entrepreneurship also demands self-assurance, a lot of
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energy, and a burning desire to succeed. There has never been more interest in
entrepreneurship. The majority of schools and universities offer entrepreneurship-
related courses or even whole programmes of study.
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The ambitious entrepreneur must make numerous judgments along the difficult
entrepreneurial process. It starts with identifying an opportunity and using ingenuity
and creativity to take advantage of it. A competitive advantage that will distinguish
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the small firm and provide clients a special incentive to use it must be found by the
entrepreneur through strategic thinking. A business plan, a written document that offers
a detailed blueprint for the new firm, should be the result of this strategic thought. There
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are basic components found in most business plans, even though each one should
be customised to the specifics of the entrepreneur and the new firm being suggested.
Typically, the business plan includes some or all of the following components:
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◌◌ Executive Summary
◌◌ Description of the Firm’s Product/Service
◌◌ Business Strategy
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Forecasted Financial Statement
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◌◌ Loan or Investment Proposal
A succinct one- to two-page overview of the whole business plan is provided in the
executive summary. The main characteristics and advantages of the product or service
should be mentioned in the description. The most in-depth section of the company plan
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is the business strategy. Here, the plan outlines the vision and goals the entrepreneur
has for the new business. Key operational, marketing, and financial plans must also
be outlined in this section. The planned financial statements should comprise income
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statements, balance sheets, capital expenditures, and monthly or quarterly projected

cash budgets. The loan or investment proposal needs to specify the kind of money
needed as well as a repayment strategy.
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Entrepreneurship is a crucial element of a flourishing market-based economy, if

not the most crucial one. People that are willing to take chances are needed to start,
organise, and successfully run new firms in free economies. The majority of business
owners work for small or family-run enterprises. These are the forces behind economic
expansion. 99 percent of companies in the United States fall under the category of
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small firms, which is defined as those with fewer than 100 employees. Ninety percent
of these small companies only have 20 or fewer employees. However, since the early
1990s, small enterprises are thought to have generated 85% of all new jobs in the
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United States.
In addition, the majority of these small companies are run by families. More than
50 million people are employed by family-owned companies, which account for more
than half of the GDP of the country. Public policies that support entrepreneurship,
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nurture start-ups, small enterprises, and family-owned firms are therefore given a lot of
attention.

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Image: Strategic Entrepreneurship Model
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Source: https://www.researchgate.net/profile/Syed-Fazal-2/publication/328849353/
figure/fig1/AS:691225707438083@1541812459439/Figure-1-Strategic-
Entrepreneurship-Model-Source-Adapted-from-Kyrgidou-and-Hughes-2010.png
What Are the Benefits of Being an Entrepreneur? r

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Even if starting a business entails a high level of financial risk, there are
numerous advantages. For those who dislike the rigid framework of a corporate job,
entrepreneurship enables one to work on one’s own terms, which includes the ability to
establish one’s own hours, be one’s own boss, and work from wherever one chooses.
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The 4 Different Types of Entrepreneurship

Though the definition of entrepreneurship is considered fluid and constantly
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evolving, there are a few different types of entrepreneurship that most entrepreneurial
ventures fall into:
1. Starting a small business. Industry-specific standards for what constitutes a small

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business range from 50 to 1,500 employees and $700,000 to $38 million in annual
revenue. When a small business owner lacks the size necessary to attract venture
capital, they frequently have to rely on family, friends, and various kinds of small
business loans to finance the growth of their company.
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2. Entrepreneurship in large corporations. Large firm entrepreneurship takes place

inside the framework of established, prosperous, and frequently publicly traded
companies. However, even companies with steady market shares and clientele
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need entrepreneurial energy and novel business concepts to adapt to changes in

consumer preferences. In order to guarantee continued economic growth, large
businesses must constantly look for new markets and cutting-edge products.
3. Scalable Startup Entrepreneurship. In Silicon Valley, scalable startups are typical
of successful businesspeople. In order to convince venture capitalists and angel
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investors to support their creative product, their business strategy calls for creating
new concepts or new products that are sufficiently innovative to alter the world.
Entrepreneurs of scalable startups are frequently big risk-takers who have such faith
in their business concepts that they are prepared to leverage significant amounts of
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capital in the hopes of someday seeing even greater financial returns.
4. Social entrepreneurship, number .The goal of social entrepreneurs is to create
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goods and services that address issues and lead to constructive social change. The
financial line of the business and making a good, tangible impact are both important
to social entrepreneurs. Social entrepreneurship has led to nonprofit organisations
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and B-Corps.
Key factor of Succeed in Business
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r si
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Image :Ways to become successful Entrepreneur

Source: https://neilpatel.com/wp-content/uploads/2017/08/
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5 Strategies for Success as an Entrepreneur

Entrepreneurs can come from different backgrounds and utilize varying skillsets to
achieve their goals. However, a careful study of entrepreneurship shows there are a
few shared strategies that can help entrepreneurs succeed in the early stages of their
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career. Let’s take a look at some of the strategies employed by the most successful
entrepreneurs:
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1. Draw on previous professional experience. Many entrepreneurs don’t rise to the top
of a traditional corporate totem pole overnight; they frequently start at the bottom.
Starting out as an employee rather than an entrepreneur offers the chance to gain
knowledge on how businesses operate. Utilize your early employment opportunities
to learn how management teams make strategic decisions and to cultivate the
(c
humility, resiliency, and competitiveness you’ll need as a new business leader.

2. Develop a diverse set of skills. In many respects, an entrepreneur is first and
foremost a full-time problem-solver. Therefore, it’s crucial for an entrepreneur to
acquire a diverse range of skills in order to be ready to handle a variety of issues

in their future leadership positions. Start by assessing one’s own strengths and Notes
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shortcomings, and then work to expand one’s knowledge base in areas where one
lacks experience. For instance, try shadowing someone who works in that profession
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to learn from them if you have a lot of creative ideas but a weak understanding of
business administration.
3. Identify a problem that needs solving, then solve it. The most successful business
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owners start by assessing the market, recognising a problem, and then developing
a business concept that aims to address that issue. For instance, Amazon saw that
online purchasing was challenging and confusing, so it developed a streamlined
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interface with a sizable selection to address the issue.
4. Surround yourself with people you can trust. Building a team of individuals with
a range of skills and expertise but similar values is the main responsibility of an
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entrepreneur or leader. Look for applicants that possess two key qualities: domain
expertise in a skill base different from one’s own, and a value system similar to one’s
own.
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5. Remain curious. Curiosity is one of the most important traits for entrepreneurs of
every age. To constantly learn and maintain individual competitive edge, individual
must always seek out new people and new experiences. Never lose the curiosity to
see around corners.
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5.2.1 Concept of Entrepreneurial Ventures
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Figure: Differences of entrepreneurial ventures

Source: https://www.george-business-review.com/wp-content/uploads/2021/12/
Types-of-entrepreneurial-ventures.jpg

An organisation that prioritises innovation and opportunism in order to create

Notes
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economic or social value is referred to as an entrepreneurial enterprise. The Ventures
are new companies or entities that have been established with the goal of generating
financial gain. Anyone with the time and resources to develop their business and deliver
in
their products to a ready market is able to launch a small business. Entrepreneurs
typically manage their businesses with high risk and few resources, though they may
start with a large amount of capital.
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Image: What is entrepreneurial venture?
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decomponentsofentrepreneurialventure-161212094726/85/entrepreneurial-
venture-and-its-components-14-320.jpg?cb=1481536371
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Since it usually begins with an idea that starts up with small amount of capital,
many divulge to this type of entities as small businesses. But there are some significant
dissimilarities between the Entrepreneurial ventures and small businesses. The major
differences are on the basis of following:
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Risk Involvement:
The entrepreneurial initiatives have high levels of risk participation and uncertainty
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and mark or target high profits. Entrepreneurs are constantly eager to take chances
with their careers and financial security in order to pursue their ideas. They also waste
resources such as time and money on unreliable business ventures. On the other hand,
the small business owner manages a small business with a set of skills and typically
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manages the revealed risks. Their bets or gambles are generally minor because they
are not in the business of taking enormous risks that are unknown. Entrepreneurs
thus place large bets on their initiatives, whereas small businesses prefer making one
decision at a time and generating steady income.
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Scope and Skills Set:

The difference can also be seen in the nature of their work; entrepreneurs
typically don’t stay in the industry for very long. Entrepreneurs are constantly coming
)A
up with new ideas and projects to launch, whereas a businessperson aspires for
sensible profitability and limited development. On the other hand, business owners
take a traditional and sensitive approach to running their company; they may not be
particularly proud of their work, but they are nevertheless content. Entrepreneurs grow
in total chaos; they are more scientific or technical, and they have various types of
(c
relationships with their enterprises. But unlike entrepreneurs who have their fingers in
many jars, business owners focus on a single project.

Entrepreneurial ventures and small businesses are distinguishable in a anomalous

Notes
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way. And both the initial stages of Ventures and Businesses require notable dedication
and initiation, but over a stretch very few small businesses become Entrepreneurial
ventures.
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Image: Small and Medium Business Big Business
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decomponentsofentrepreneurialventure-161212094726/85/entrepreneurial-
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5.2.2 Strategic Issues in Entrepreneurship Ventures
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Image: Reasons for Business Fail

Source: https://www.investopedia.com/thmb/7XbNXv_NnYwPX9NQZSQSRVZpN-
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A=/1333x1000/smart/filters:no_upscale ()/top-6-reasons-new-businesses-fail.
aspx_final-a6c9c5400448431c80dd8df79e4a7b16.png
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Entrepreneurs face many challenges in today’s ultra-competitive business world.

Fortunately, entrepreneurs also have more resources than ever before to tackle those
problems.
The following 10 challenges are faced by many entrepreneurs today. Perhaps

individual’re run up against some of them already. Read on to learn why each challenge
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exists, and to get solutions and workarounds so individual can operate individual
business efficiently and successfully.

1. Cash Flow Management

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Small businesses depend on cash flow to survive, yet many business owners find
it difficult to pay their expenses while they wait for checks to arrive, let alone take care
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of themselves. Delayed invoicing, which is typical in the business world, is a part of
the issue. Person does a job, sends an invoice, and then receives payment (ideally)
30 days later. Individuals must pay everything in the meantime, including individual
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mortgage payments, individual grocery bills, and individual employees or contractors.
When a customer doesn’t pay, an individual runs the risk of losing everything. Waiting to
get paid can make it tough to get by.
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The solution: Budget and plan
Even though careful planning and budgeting are essential to sustaining financial
flow, people sometimes still have to worry about their obligations.
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◌◌ To increase cash flow, one strategy is to demand a down payment for specific
goods and services.
◌◌ By requiring a down payment, one may at least be confident that one won’t be
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left paying others’ bills; by boosting the down payment with some profit, one
can pay one’s own.
Increasing the deadline for invoice payment is another method for enhancing cash
flow. r
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◌◌ Invoice clients within 15 days, which is half the typical invoice period. This
means if a customer is late with a payment, individual have two weeks to
address it and get paid before the next month’s bills are due.
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◌◌ In addition, more and more companies are requiring immediate payment

upon project completion — and in our digital age when customers can pay
invoices right from their mobile phones, it’s not a stretch to request immediate
payment.
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By asking their own vendors to invoice them 45, 60, or even 90 days in advance,
one may also address cash flow management from the other side of the equation,
giving oneself plenty of time for payments to arrive and checks to clear. Once you have
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explained your plan, the vendors may be prepared to cooperate with you if you can
build solid relationships with them and are a loyal customer.
And if someone wants to pay their bills more quickly and save money, they might
think about emailing their checks.
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2. Hiring Employees
Who among us finds job interviews the most dreaded? It’s entrepreneurs, not
)A
potential candidates. Reviewing resumes, participating in interviews, and eliminating

unqualified prospects are all parts of the hiring process that might require several days
of individual time. Then, one can only hope that one can present a tempting package to
entice and keep the greatest employees.
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The solution: Be exclusive

In terms of the requirements for candidates, the nature of the job, the days and

hours of work, and the compensation and benefits offered, far too many help wanted
Notes
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advertising are highly ambiguous. Pre-qualifying individuals through exclusive
help wanted ads that are quite clear in what it takes to get employed at particular
organisation and what the day-to-day work requires can save oneself a tonne of time.
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Use great targeting to approach each personnel search in the same manner as you
would a customer-focused marketing campaign.
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Take the time to seek real references: not the neighbor lady individual candidates
grew up with, but people who can honestly attest to their work ethic and potential. Once
individual’re picked a candidate and before individual’re made a job offer, ask them
specifically what it will take to keep them employed with individual for the long haul.
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◌◌ Request that they be upfront about their expectations.
◌◌ If they do an excellent job for the person, the person will know what kind
of rewards they’re looking for and can alter as necessary: Do they desire
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additional time off? The potential for development? More money? The
absence of micromanagement?
This is not to argue that employers must go out of their way for their employees,
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but it makes sense that if expectations are set up front for both parties, a long-lasting,
mutually beneficial client-boss relationship can be built.
3. Time Management r
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Time management might be the biggest problem faced by entrepreneurs, who
wear many (and sometimes all) hats. If individual only had more time, individual could
accomplish so much more!
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The solution: Make time

Like money, time doesn’t grow on trees, so individual have to be smart about how
individual spend it. Here are some tips:
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◌◌ Make goal lists: Each person should have a list of lifetime goals that is further
divided into annual, monthly, and weekly goals. Individual weekly targets will
subsequently be divided into daily tasks. In this way, all a person needs to do
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to keep moving toward their long-term objectives is what is on their daily to-do
list.
◌◌ Discard any assignments that do not align with individual objectives.
◌◌ Assign duties to others if they are not absolutely necessary for completion by
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one person.
◌◌ Ask oneself again, “Is what I’m doing right now the best you.
4. Delegating Tasks
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Individual know individual need to delegate or outsource tasks, but it seems every
time individual do, something gets messed up, and individual have to redo it anyway.
The solution: Get reliable help and be clear with individual requests
(c
Find good contractors and personnel (see above), at least to begin with. The cost
to the individual might be slightly higher, but the time saved (and the resulting earning
potential) more than makes up for it.
Be precise about what the person wants done next. It will take a little longer at
Notes
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initially, but describe all the specific stages that you need one-on-one assistance with.
Never expect that someone receiving individual assistance would be able to think
by himself straight away. So, don’t say, “List stats in a spreadsheet,” when it’s more
in
effective to instruct them to “Alphabetically list XYZ in the first spreadsheet column, then
list statistic A in the next column,” and so on. It might seem like overkill, but take the
time to be specific once, and individual help will get it right every time thereafter.
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5. Choosing What to Sell
Individual know individual could make a mint if individual just knew what products
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and services to sell. Individual’re just unsure how to pick a niche.
The solution: Conduct research

Admit that you’re not very good at finding profitable niches, and assign the work
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to someone who is. Instead of hiring a large, expensive marketing company, find a
freelance researcher with experience in the industry you’re thinking of going into (retail
e-commerce, service industry, publishing, etc.). Ask them to perform market research
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and produce a report outlining prospective niches, supported by profit margins and
a thorough SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats).
This isn’t to argue that you should let someone else make the decision for you, but
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if you’re not excellent at spotting niches, it makes sense to get advice from someone
who is. Then, a person might consider the options for themselves to see if they agree.
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Individuals can save themselves a great deal of time, money, and difficulties by taking
this action right now, not to mention their entire business and life.
6. Marketing Strategy
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Individual don’t know the best way to market individual products and services:
print, online, mobile, advertising, etc. Individual want to maximize individual return on
investment with efficient, targeted marketing that gets results.
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The solution: Find marketing expertise

Again, it’s a smart idea to outsource your personal marketing strategy to someone
who is skilled at developing marketing plans and placing ads. Individuals now only
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require a fundamental marketing strategy: Who is each person’s target market, and
what marketing initiatives will each person make to encourage purchases? Give
individual planner a budget and tell them to craft a plan that efficiently uses that budget
to produce profits. Experimentation is not appropriate at this time. Individuals can do
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that when they create a baseline that is successful.
7. Raising Capital
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Individual want to start or grow individual business, but individual have little capital
to do it with.
The solution: Start small

There are many ways to earn funding, from traditional bank loans to Kickstarter
(c
campaigns and self-fueled growth models. Instead of trying to launch a multimillion-

dollar corporation overnight, focus on individual initial core customers.

◌◌ Continue to seek out new clients, of course, but also make an effort to impress
Notes
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the clients you presently have. More clients will come asking for specifics as
word of mouth grows.
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◌◌ As they do, create systems and business procedures that let people assign
jobs to others without compromising quality. Individual businesses will expand
gradually and steadily, and people will be able to address issues as they arise.
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Consider where you want your life to be in five years. Can one get there on their
own, even if it means slightly delaying their progress in the process? To ensure that
you aren’t sacrificing too much of your business in order to obtain finance, consult an
attorney if you do believe that you
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8. Strapped Budget
Even though cash flow is fine, it seems individual never have enough in individual
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budget to market individual company to its full potential.
The solution: Prioritize for efficiency
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Nearly all business owners have budgetary difficulties occasionally. Spend money
where it works individually, prioritise individual marketing efforts with efficiency in mind,
and leave the rest for running costs and testing out alternative marketing strategies.
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Keep a close check on your own finances as well; there may be places you can cut
corners to free up additional money. Cut costs unless they are really necessary for the
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individual firm and/or are an investment with a projected return. In fact, try this activity:
See how a slim person can operate their own firm.
◌◌ You don’t have to do it, but reduce whatever you can and assess whether you
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still believe in your ability to run your business (save for what individual have
to delegate and market with).
◌◌ There is a sweet spot that will enable a person to be equally effective and
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still have money left over to support growth anywhere between the individual’s
leanest number and the individual’s current budget.
9. Business Growth
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Individuals come to the point at which individual can’t take on any more work in
individual current structure.
The solution: Reconsider individual processes and roles

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Create new procedures with a task delegation focus. Once they’ve had some
degree of success, many entrepreneurs who are accustomed to wearing all the hats
find themselves in this situation. Since people are doing everything, when they reach
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a self-imposed ceiling, personal growth stops. The only way to succeed is to transfer
responsibility to others in order to remove oneself from the production process and go
from management to pure
10. Self Doubt

(c
The life of an entrepreneur is not glamorous, at least not at first. When something
goes wrong or when progress is slower than desired, it is very simple to become
demoralised. Self-doubt starts to set in, and the person can feel like giving up.
The solution: A good support system and focusing on tasks

Notes
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For entrepreneurs, the capacity to overcome self-doubt is an essential quality. It
will be beneficial to have a strong network of supporters, including close relatives and
in
friends who understand and sympathise with one’s needs as well as an advisory board
of other business owners who can provide unbiased advice on the course of one’s
particular enterprise.
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The best technique to overcome self-doubt is to focus on your personal task and
goal lists. When you’re feeling demotivated, glance at your to-do list and remember that
the activities you complete today are moving you closer to your long-term objectives.
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By taking action, you’ll be one step closer to company success and can relax knowing
you’re on the right track.
There have been countless articles written about how to overcome the difficulties
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faced by entrepreneurs. Use intelligence and perseverance to your advantage to
continue working toward your own goals. Recognize that you are not the only one who
struggles. As a result, there are a variety of services available to assist entrepreneurs
through their toughest times and help them achieve their goals of starting and growing
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successful businesses.
5.2.3 Dealing with Strategic Challenges in Organisation

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Nobody can dispute how difficult the business environment is right now. A few of
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the challenges that modern businesses encounter on a daily basis include multiple
supply chain disruptions, altering market needs, emerging consumer trends, talent
shortages, innovative technology, rising cybersecurity threats, and new legislation.
ni
It makes sense that some business owners would suffer in this situation. Finding
answers to each and every one of these problems can be a difficult undertaking,
especially since there is never a complete solution because problems alter constantly.
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I know that might sound discouraging, but I think that, with the right attitude and
a combination of different approaches, company owners can be up to the task of
adapting their businesses to current demands. Doing so might look different for different
businesses, but, in my opinion, the following three strategies are essential for anyone
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going through that journey.
1. Exercise constant adaptation and learning.

Businesses frequently adopt new technologies as a fix for their issues. They
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believe that adding advanced platforms and apps will be sufficient to maintain progress.
The situation is far from straightforward, though. While technology can undoubtedly be
helpful, it falls far short.
)A
Companies will never be able to fully realise the advantages of new digital
solutions without an attitude of ongoing adaptation and learning. I’m trying to convey
that technology is a tool that businesses can use to their advantage if they know how to
use it. Business executives must constantly adapt and learn for this reason; there is no
other way to fully incorporate technology into their workflows.
(c
Adapting and learning about new technologies is just a part of the journey. The
other part implies adopting a continuous improvement mindset that also considers

talent and collaboration. Team members, partners and even competitors can always
Notes
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show new paths that are worth following, especially if the traditional methods for dealing
with a specific issue aren’t working.
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2. Aim to become a tech company.
I think that nowadays is all about imitating the processes of the computer sector,
just like it did with the practises of the automotive industry that characterised labour
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for the majority of the 20th century. Every business is now a technology company,
according to a 2013 article by former executive vice president of Gartner Peter
Sondergaard. When he published an essay on LinkedIn earlier this year about the
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subject, Nacho De Marco, the CEO of my company, I feel he also emphasised an
essential distinction: A tech corporation is one that “goes beyond the mere adoption of
cutting-edge technologies,” according to the definition. Businesses must adopt a new
mindset in order to effectively employ digital technology to chase new opportunities in a
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cutthroat market.
Companies from a variety of industries are already implementing agile approaches,
si
typically in the computer industry. However, that is by no means the only thing that
businesses may do to turn into a tech company. I believe that transitioning to a tech
firm also requires adopting a new way of thinking, where managers handle procedures,
skills, and strategies instead of people. By elevating business operations, organisations
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gain more flexibility and are better equipped to handle a variety of new difficulties as
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they arise.
3. Rethink leadership.
For the longest time, businesses across many sectors have often seen executives
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as enlightened gurus who can carry the weight of their companies entirely on their
own. That idea of self-made business people dominated our approach to leadership for
decades and still pops up here and there. That’s unfortunate, especially because the
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idea of a single person being able to tackle the multiple challenges of today’s business
world is utopic.
Today’s problems and challenges are so many that no one could possibly
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be able to solve them on their own or without assistance. Because of this, we need
to reconsider our leadership tactics so that the “executive saviour” role is replaced
with one of “willing collaborator.” A willing collaborator leads the way by working with
important specialists in various fields to find the best course of action rather than trying
to force their opinions on everyone.
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Because there aren’t experts in every field, cooperation is the only method to deal
with the vast array of problems that face the modern world. Therefore, leaders must
have the humility to admit when they can’t accomplish a task on their own and to seek
)A
advice and assistance from others. Encourage a cooperative business culture that
instils humility throughout the entire organisation.
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Case Study
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1. Audi super-charges awareness for the e-tron and carbon neutral driving
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The e-tron, Audi’s flagship car that is pioneering the company’s transition to
carbon-neutral driving, is fashionable, inventive, and entirely electric. It’s intended at a
group of people with spending power, an interest in innovation, and a desire to take the
lead—an audience whose natural habitat is LinkedIn. Audi’s LinkedIn campaign quickly
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established the e-tron as the leading contender for people considering the future of
driving by focusing on both e-mobility influencers and mass affluent auto purchasers. It
produced the greatest conversion rate of any platform, a best-in-class (CTR) of 2.31%,
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and an engagement rate of more than 4%.
The Challenge
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●● Reach the e-tron’s target audience of premium auto buyers with an interest in
innovation and e-mobility
●● Position Audi as a leader in carbon neutral driving
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●● Raise awareness of the e-tron
●● Drive qualified visits to the Audi website
Inspiring Innovation r
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The Carousel Ad format on LinkedIn was the perfect platform for exhibiting the
e-innovative tron’s and fashionable appearance. Elegant photography was utilised
by Audi to highlight the e-cutting-edge tron’s cockpit display, virtual mirrors, which
present a digitally improved version of the driver’s surroundings, and ultra-fast charging
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technology.
A very significant engagement rate of over 4% was sparked by the presentation of

new technology with visual impact, which led to extensive discussions about issues like
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battery life and the advantages of speeding up car charging. According to Cristina de
Blasio, Media Manager at Audi Spain, “The information we’ve gathered from the calibre
of the debates on LinkedIn have helped us to modify our campaign messaging and
keep improving engagement.” In order to better understand the target market, “we’ve
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also produced useful data on the types of audiences engaging with the e-tron.”
Engaging carbon neutral drivers at scale

The e-target tron’s market of drivers with spending power and a thirst for innovation
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was a perfect fit for LinkedIn’s audience and targeting capabilities. Audi may effectively
reach these premium drivers by utilising LinkedIn’s specialised mass affluent niche.
Parallel initiatives aimed at e-mobility influencers who were members of LinkedIn
)A
Groups contributed to the development of beneficial word-of-mouth.
“LinkedIn is by far the most suitable platform to drive awareness of Audi’s move
to 100% electric, carbon neutral driving,” explains de Blasio. It’s an audience with
high purchasing power and an environment where such people have an appetite for
(c
discussing innovation and technology.”

This audience and mentality combo produced explosive results for the e-LinkedIn
Notes
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tron’s launch. The CTR, which was 2.32%, was significantly greater than LinkedIn’s
auto standards and higher than any other platform employed in the campaign. In terms
of website visitors who matched the profile of the target demographic, LinkedIn also
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contributed to the greatest conversion rate.
1. What are the results of this case?
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Summary
●● In order to evaluate the performance of technology transfer and commercialization
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initiatives, a hybrid portfolio method will be employed in light of the conclusions
from the seven case studies that were previously given.
●● This approach, which incorporates both quantitative and qualitative metrics, is
flexible in how it is applied.
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●● Instead than having foundations on economic models that bring levels of
uncertainty and are more susceptible to criticism, it should most definitely be
founded on actual data and facts.
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●● This strategy would demand a preconception-free and open-minded mindset as
well as a willingness to learn via experience.
Glossary r
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●● Change Management: The only thing that is constant in life, so the saying goes,
is change. This assertion is accurate for both commercial organisations. Almost
often, both internal and external variables influence how things unfold. Smoothly
implementing these adjustments is one of managers’ most crucial responsibilities.
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This procedure is referred to as change management.

●● Change: Change is really just a deviation from the norm. People become
habituated to specific methods whenever they accomplish a task in them. They
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create strategies that they may use frequently to complete these jobs. Any
modification to these techniques only represents change
●● Organisational Change Management: According to the definition of organisational
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change management, a change in a business process has the potential to have

a big influence on the entire organisation. The organisation may undergo change
as a result of a number of reasons, such as company goals, service operations,
and other facets. The major goals of organisational change management are to
increase corporate sales and increase staff productivity.
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●● People-centric Organisational Change: People-centric changes mainly focus

on hiring new employees or implementing new policies for employees. These
)A
changes are mainly prone to emotional responses. The organisation should take
up the responsibility of preparing the employees for this emotional transition phase
and guide the team accordingly.
●● Organisational Wide Change: Organizational-wide change refers to extensive
transformation that impacts all organisational policies. This modification shows
(c
how a lengthy-in-existence policy has gotten out of date. Such significant

alterations are simple to spot for employees.

●● A thorough planning approach and ongoing communication are necessary to

Notes
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achieve major changes. The change’s outcome will depend on the tactics used
and how they are carried out by each individual.
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●● Unplanned Change: It’s difficult to predict unplanned changes within the
organisation and individual need to handle in a systematized way. In case of any
security breach or disruption or chaos, implementing unplanned changes can
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minimize the chances of unplanned risks.
●● Entrepreneurship: The French term “entreprendre,” which means “to undertake,”
is the root of the English word “entrepreneurship.” An entrepreneur is a person
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who engages in entrepreneurship. Although it happens everywhere, free-market
economies are particularly known for their high levels of entrepreneurship.
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1. The ___M Corporation is an illustration of a business that consistently seeks to be
the best in terms of change and innovation.
a. 2
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b. 3
c. 4
d. 5 r
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2. The only thing that is constant in life, so the saying goes, is______.
a. Change
b. Design
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c. Procedure
d. outcome
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3. Change is really just a deviation from the_____.

a. Norm
b. Agenda
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c. Perspective
d. object
4. Every effective manager must have the ability to foresee expected __________.
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a. Improvements
b. Developments
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c. Changes
d. performance
5. An organisation must always adapt as technology __________
a. Primarily
(c
b. Territory
c. Advances

d. none
Notes
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6. The __________of monitoring and assisting change at whatever level where it
occurs is known as “change management
in
a. Process
b. Chart
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c. Graph
d. link
7. The ______of “change” is not just a facet of life in today’s slow-paced world; it is
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also crucial to surviving.
a. Opportunity
b. Delphi
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c. Idea
d. movement
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8. Lewin’s model is the basis for comprehending organisational change. It was _____
developed by Kurth Lewin and had three steps in it.
a. First
b. Secondary
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c. Territory
d. fourth
9. At least ____of executives, according to McKinsey, think that innovation is crucial to
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their growth plan

a. 70%
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b. 60%
c. 84%
d. 90%
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10. Finding out exactly what people are aiming for is the____ stage in the process of
building an inventive strategy.
a. First
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b. Second
c. Forth
d. fifth
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11. The French term “entreprendre,” which means “to undertake,” is the _____of the
English word “entrepreneurship.
a. Link
(c
b. Medium
c. Root

d. medium
Notes
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12. The Ventures are new companies or entities that have been established with the
goal of generating financial______.
in
a. Profit
b. Gain
nl
c. Bonus
d. incentive
13. The entrepreneurial initiatives have high levels of risk participation and uncertainty
O
and mark or target high ______
a. Loss
b. profits
ty
c. rewards
d. awards
si
14. Entrepreneurs face many _________in today’s ultra-competitive business world.
a. Challenges
b. Strength r
ve
c. Weaknesses
d. opportunities
15. A government’s policies frequently shift. Every term, even the government itself
changes. The _____environment is greatly influenced by these variables
ni
a. Internal
b. External
U
c. marketing
d. nil
16. While the change management process can be different depending on the industry
ity
and applied in different ways based on the department versus organisational levels,
rolling out change management in a “proper way” tends to follow a few basic
____________.
a. Laws
m
b. Agenda
c. Ethics
)A
d. principles
17. With the general principles in place, one_______ step in the change management
process is a review. Despite the best efforts of management personnel to
communicate effectively and properly assign responsibilities, change is a dynamic
(c
process
a. Primary

b. Last
Notes
e
c. Final
d. Second
in
18. People-centric changes mainly ______on hiring new employees or implementing
new policies for employees
nl
a. Focus
b. Emphasis
c. Lay off’
O
d. selecting
19. Organizational-wide change refers to extensive transformation that _______all
organisational policies.
ty
a. Impacts
b. Effects
si
c. Relates
d. indicates
r
20. Strong leadership requires a manager to have a bank of change management
techniques at their disposal at all__________.
ve
a. Phases
b. Periods
c. Times
ni
d. ages
Exercise
U
1. Disucss in detail the concept of change management in organisation?

2. What are the types of change and how to manage in strategic change?
ity
3. Elaborate the functions of technology in strategic development.

4. Briefly explain entrepreneurial ventures along with the example.
5. What are the difficulties that comes in between entrepreneurial ventures?
m
6. How can we overcome strategic challenges in organization.
Learning Activities
)A
1. The Why, What, and How of Management Innovation. Discuss in brief.

2. Prepare a presentation on entrepreneurship venture.

1. b 2. a
(c
3. a 4. b
5. c 6. a
7. c 8. a
Notes
e
9. c 10. a
11. c 12. b
in
13. b 14. a
15. b 16. d
nl
17. c 18. a
19. a 20. c
O
1. De Oliveira, J, Escrivão, E, Nagano, MS, Ferraudo, AS, & Rosim, D 2015,
‘What do small business owner-managers do? a managerial work perspective’,
ty
Journal of Global Entrepreneurship Research, vol. 5, no. 1), 19-39.
2. Dhliwayo, S 2017, ‘Defining public-sector entrepreneurship: a conceptual
operational construct’, The International Journal of Entrepreneurship and
si
Innovation, vol. 18, no. 3, pp. 153-163.
4. Kumar, D 2016, Enterprise growth strategy: vision, planning and execution,
Routledge, Abington.
r
5. Kuratko, DF, Morris, MH & Schindehutte, M 2015, ‘Understanding the
ve
dynamics of entrepreneurship through framework approaches’, Small Business
Economics, vol. 45, no. 1, pp. 1-13.
6. Kuratko, DF 2016, ‘Different entrepreneurial ventures for greater societal value:
a portfolio approach to assist public policy’, The Antitrust Bulletin, vol. 61, no. 4,
ni
pp. 546-560.
7. Lidow, D 2016, ‘The 4 stages of enterprise maturity: From startup to self-
sustaining’, Entrepreneur, Web.
U
8. Lobonţiu, G & Lobonţiu, M 2014, ‘The owner-manager and the functional

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ity
8. Morris, MH, Neumeyer, X, Jang, Y & Kuratko, DF 2018, ‘Distinguishing types

of entrepreneurial ventures: an identity based perspective’, Journal of Small
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9. Parker, SC 2018, The economics of entrepreneurship, 2nd edn, Cambridge
m
University Press, Cambridge.

10. Vakili, F, Tahmasebi, N, Tahmasebi, S & Tahmasebi, D 2017, ‘Role of education
)A
in entrepreneurship development’, Journal of Ecophysiology and Occupational

Health, vol. 16, no. 3-4, pp. 78-87.
11. Carayannis E (1996) Re-engineering high risk, high complexity industries
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(c
12. Carayannis E (1997) Data Warehousing, Electronic Commerce, and

Technological Learning: Successes and Failures from Government and Private

Industry and Lessons Learned for 21st Century Electronic Government, Online
Notes
e
Journal of Internet Banking and Commerce, March
13. Carayannis E (1998a) The strategic management of technological learning in
in
project/program management: the role of extranets, intranets and intelligent
agents in knowledge generation, diffusion, and leveraging. Technovation
18(11):697–703
nl
14. Carayannis E (1998b) Higher order technological learning as determinant
of market success in the multimedia arena; a success story, a failure, and a
question mark: Agfa/Bayer AG, enable software, and sun microsystems.
O
Technovation 18(10):639–653
15. Carayannis E (1998–2002) George Washington University Lectures on
Entrepreneurship.
ty
16. Carayannis, E. The Globalization of Knowledge and Information Creation and
Diffusion Processes and Standards in an Emergent Trading Groups Context:
EU, NAFTA, Mercosur, and APEC, Seminar on Globalization of Knowledge
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Emergent Trading Groups Context: Laying the Foundations for Latin American
Competitiveness in the 21st Century, University of Puerto Rico Rio Piedras,
San Juan, Puerto Rico, March 14, 1997
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17. Carayannis E (1999) Fostering synergies between information technology and
ve
managerial and organizational cognition: the role of knowledge management.
Technovation 19(4):219–231
18. Carayannis E (2000–2009) GWU Lectures Carayannis E (2001) Learning
more, better, and faster: a multi-industry, longitudinal, empirical validation of
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technological learning as the key source of sustainable competitive advantage

in high-technology fi rms.
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19. Int J Technovation Carayannis E (2002) Is higher order technological learning a

firm core competence, how, why, and when: a longitudinal, multi-industry study
of firm technological learning and market performance. Int J Technovation
22:625–643
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20. Carayannis E (2008) Knowledge-driven creative destruction or leveraging

knowledge for competitive advantage: Strategic Knowledge Arbitrage and
Serendipity (SKARSE) as Real Options Drivers (RODs) triggered by co-
opetition, co-evolution and co-specialization (C3). J Ind Higher Edu 22(6):343–
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21. Howells J (1995b) A socio-cognitive approach to innovation. Res Policy
24(6):883–894 Howells J (1999) Research and technology outsourcing.
)A
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22. Huber GP (1991) Organizational learning: the contributing processes and
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(c

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Member Secretary : Ms. Rita Naskar

Module - I: Fundamentals of Strategic Management 01

Module - II: Environment Analysis and Diagnosis 50

2.1 Concept of Environment Analysis

2.2 External Environment Scanning

2.2.3 Industry Analysis Through Porter’s Approach

2.3.2 Resource Based Approach

Module - III: Strategic Formulation and Choice 95

3.1.1 SWOT Analysis for Strategic Choice

Module- IV: Strategic Implementation and Control 140

4.2.7 Importance of Strategic Control

Module - V: Strategic Change, Innovation and Entrepreneurship 184

5.1.1 Concept of Change Management in Organisation

5.1.4 Theories of Planned Change in Organization

5.1.7 Role of Innovation in Strategic Development

5.2.2 Strategic Issues in Entrepreneurship Ventures

Module - I: Fundamentals of Strategic Management

●● Meaning and concept of Strategic Planning

1.1 Introduction to Strategic Planning

1.1.1 Meaning and Concept of Strategic Planning

Figure: Meaning of Strategic Planning

Planning strategies and putting them into action to accomplish organisational

Given the organisation’s strengths and weaknesses, strategic planning helps us

It Startegic Planning is “a process through which managers develop and put

Planning is an action we take before acting, which is called anticipatory decision-

Strategic Planning – Definition

Strategic planning is a methodical, legally-recorded process for identifying the few

continuously develops new systems through strategic planning to accomplish

i) The fundamental presumptions made by management regarding the

iii) SWOT analysis execution.

v) Creating, carrying out and keeping track of operational or tactical strategies to

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Strategic Planning – Features

Strategic Planning: the following advantages of strategic planning are available:

Members are guided toward organisational objectives through strategic planning.

Amity Directorate of Distance & Online Education

Planning Strategically: Restrictions

Although strategic planning is crucial to management, its application has practical

which makes this task challenging. These are the restrictions:

exacerbated by consequences that make planning extremely difficult in a complex

(1) Human Error:

and meaningful objectives, a propensity to overlook planning premises, a failure to

factors, a lack of support from top management, a lack of authority delegation, a

is really difficult to operate particularly in large organisations. The planning also

or making lesser degree of planned work.

1.1.2 Strategic Management Process

a competitive edge is what strategic management is all about. Individually have a

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Most importantly, the company’s managers and employees benefit from a

Figure: Strategic Management Process

Steps of Strategic Management Process

Strategic Mission and Goals The management evaluates the company’s

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Assessment and Control

Problems of Strategic Implementation Process

Reporting System is Poor

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Low Data Availability

1.1.3 Challenges to Strategic Management and Organisational