UNIT-1: AN OVERVIEW

UNIT-1.1: STRATEGIC MANAGEMENT

INTRODUCTION

Strategic management is the two combinations of words:

1. Strategic:
 "Strategic" relates to carefully planning actions to achieve specific goals.
 It involves thinking ahead, considering the big picture, and making
choices that give an advantage.
2. Management:
 "Management" is about organizing and overseeing resources (like
people, money, and time) effectively to reach objectives.
 It involves coordinating activities, making decisions, and ensuring things
run smoothly.

So, when we combine "strategic" and "management," we're talking about

thoughtful planning and an organized approach to achieve goals efficiently,
considering both the overall vision and the day-to-day operations of an
organization. It's about being smart and effective in how you lead and
navigate towards success.

Strategic management involves defining the company's mission, vision, objectives, and goals
which clarify the company's business, where it wants to be in the long run and a scale to
measure its progress. This, in turn, provides the necessary direction for the organization as well
as its employees to work towards.
Definition:

Strategic management is the ongoing planning, monitoring, analysis, and

assessment of all necessities an organization needs to meet its goals and
objectives.
Strategic management is the management of an organization’s resources to
achieve its goals and objectives.
Strategic management involves setting objectives, analyzing the competitive
environment, analyzing the internal organization, evaluating strategies, and
ensuring that management rolls out the strategies across the organization.

Strategic Management Process

Strategic management is the art & and science that is related to formulating,
implementing, and evaluating cross-functional decisions that are helpful in the
accomplishment of the objectives of the organization.

In other words, the ongoing process, in which broad plans are formulated, implemented
& and controlled to lead the organization toward the achievement of its strategic goals
under the provision of its internal & and external environment.

Stages of Strategic Management Process

There are three stages of the strategic management process which are as follows:-

1. Strategy Formulation
2. Strategy Implementation
3. Strategy Evaluation

Each one is discussed below

1. Strategic Formulation

The stages of the strategic management process start with strategic implementation.
Business activities are executed by the formulation of strategy which is referred to as
Strategy Formulation.

The following elements are developed in the strategy formulation stage.

Vision & Mission: Include the target of the business

Strengths & Weaknesses: Strong & weak points of business

Opportunities & Threats: Associated with the external business environment

Besides the above elements, long-term goals & and objectives are also set in the
strategy formulation. Alternative Strategies are generated to accomplish long-term goals
& particular strategy is selected to be pursued.

Following are some of the important considerations that should be followed for best
strategy formulation.
  Resources allocation
 Businesses to enter or maintain
 Mergers or joint ventures
 Businesses to liquidate or divest
 Entering the foreign markets
 Business expansion
 Resistance of takeover

2. Strategy Implementation

Strategy Implementation is the second stage of the strategic management process,

annual objectives are established along with the devising of policies. Moreover, the
employees of the organization are motivated & and resources are allocated to execute
formulated strategies.

Strategy implementation further includes the following.

 Development of a culture that is supportive of the strategy

 Development of potential organizational culture
 Re-direction of the efforts of marketing
 Preparation of budgets
 Preparation & and usage of information
 Connecting Compensation of employees with organizational performance

The stage of strategy implementation is also referred to as the action stage of strategic
management. The managers & and employees are mobilized in the implementation
phase so that the formulated strategies are put into action.

The strategy implementation stage is the most difficult stage among all other stages of
strategic management. Personnel discipline, sacrifice & and commitment are required in
this stage of strategy implementation.

The strategy that is formulated but not implemented lacks any useful purpose. Strategy
implementation is considered of utmost importance in the stages of the strategic
management process.

3. Strategy Evaluation

Strategy evaluation is the last step of the stages of the strategic management process.
The final stage of the strategic management process is strategy evaluation. The
managers must have sufficient know-how about the problems and improper working of
strategies.

This task of the management is better accomplished through strategy evaluation which
provides needful information to the managers in this regard. Moreover, forces of
external & and internal environment change with time therefore all the strategies also
require modifications.

UNIT-1.2: KEY TERMS IN STRATEGIC MANAGEMENT

8 Important Strategic Management Key Terms

There are some of the basic strategic management key terms that need to be considered at the
beginning to completely understand strategic management.

These strategic management key terms are eight in number and are the base of strategic
management.

1. Strategists
2. Vision & Mission Statement
3. External Opportunities & Threats
4. Internal Strengths & Weaknesses
5. Long Term Objectives
6. Strategies
7. Annual Objectives
8. Policies

1. Strategists

Those people in the organization who are fully responsible for the failure or success of
the organization are referred to as strategists. Strategies are formed by strategists.
Examples of strategists include the chief executive officer, chair of the board, chief
executive officer, president & and owner, entrepreneur or dean, etc.

The information is gathered, analyzed, and organized with the help of strategists. They
identify industry & competitive trends, establish scenario analysis & forecasting models,
evaluate corporate & divisional performance, and point out new marketing opportunities,
highlight new threats for the organization & prepare potential action plans.

They further assist in supporting or staffing roles. The decision-making at the top level
of management in the organization is mostly taken by these strategists.

The most crucial & and visible strategic manager in the organization is the CEO.
Moreover, every manager in the organization who has the responsibility for profit or loss
results, responsibility for division or unit, or having clear authority over some element of
the organization is said to be a strategist or strategic manager.

Different organizations have different kinds of strategists whose working alter in the
phase of formulation, implementation & and evaluation of strategies. The personal
philosophies of strategists also affect the selection of certain strategies.

Some other foundations differentiate one strategist from others like attitudes, ethics,
values, concern for social responsibility, willingness to take risks, management style,
concern for profitability, concern for long-term versus short-term objectives, etc.

2. Vision & Mission Statement

Vision Statement

A vision statement is quite necessary for the operation of the organization as it provides
an answer to the question of what the organization wants to become. The first step in
strategic planning is to develop the vision statement and after that mission statement is
prepared. Most organizations develop single-sentence vision statements.

Mission Statement:

A mission statement is a long-lasting statement that differentiates one organization from

another similar organization. The scope of the operations of the organization in terms of
market & and product is identified through the mission statement.

The basic question that is related to the activities of the business is cleared with the
help of the mission statement. It guides the nature & and scope of current operations of
the business as well as the future aspects of the market conditions & and opportunities.
The future direction of the organization is highlighted by the mission statement.

3. External Opportunities & Threats

External opportunities and threats are also part of strategic management’s key terms.
All those trends & and events that are related to the social, economic, environmental,
cultural, demographic, political, legal, technology & and technology & and competition
that can harm or benefit an organization constitute external opportunities & and threats.

One major fact about the opportunities & and threats is that they are out of control of the
organization to much extent and hence they are “external” to the organization.

Following are some examples of external opportunities & and threats.

 Computer revolution
 Population shifts
 Changing work values & and attitudes
  Space exploration
 Increased competition from foreign companies
 Space exploration
 Recyclable packages etc

The external opportunities & and threats are significant for the organization as
opportunities need to be availed while threats should be avoided.

For this purpose, there is a strong need to identify, monitor & and evaluate external
opportunities & and threats so that the organization becomes successful in the long run.

4. Internal Strengths & Weaknesses

Those activities of the organization that is under the control of the organization, and
may show good and bad impact on the organization are known as internal strengths &
and weaknesses of the organization. These are present in the marketing, management,
production/operation, finance/accounting, information technology & and research & and
development activities of the organization.

It is quite an essential strategic activity for an organization to identify & and evaluate
organizational strengths & and weaknesses. Organizations need to adopt strategies that
capitalize on their strengths while improving their weaknesses.

Moreover, the strengths & and weaknesses of the organization can also be ascertained
relative to the competitors.

5. Long-Term Objectives

Long-term objectives are also one of the important strategic management key
terms. Long Term Objectives are referred to as particular results that an organization
wants to accomplish in targeting the mission. Expected results by targeting certain
strategies are represented by long-term objectives.

Strategies include those actions that are executed for the accomplishment of long-term
objectives. There should be a consistent time frame for strategies & and objectives
which range from two to five years.

6. Strategies

The means through which allow us to achieve long-term objectives.

The following are included in the business strategies.

 Geographic Expansion
 Diversification
  Product development
 Acquisition
 Retrenchment
 Market penetration
 Liquidation and joint venture

A large amount of the resources of the organization are required along with the
decisions of top management for the application of strategies in the form of actions.
Strategies are future-oriented as these will affect the long-term prosperity of the
organization.

Both internal as well as external factors should be considered and therefore the
strategies have multi-divisional consequences for the organization.

7. Annual Objectives

Those short-term targets that help achieve the long-term objectives of the organization
are called annual objectives. The annual objectives must be quantitative, measurable,
realistic, challenging, consistent & and prioritized. These must be developed at
functional, divisional & and corporate levels in large organizations.

This objective must be stated in terms of marketing, management,

production/operations, finance/accounting, and research & and development. Each
long-term objective always demands a set of annual objectives for its successful
accomplishment.

The allocation of resources is represented by annual objectives. Annual objectives are

significant for Strategy Implementation whereas the Strategy Formulation phase
contains long-term objectives.

8. Policies

Annual objectives are accomplished using policies. Policies contain rules, guidelines &
and procedures developed to assist efforts to accomplish stated objectives. Decision-
making is guided through policies & and recurring and repetitive situations are also
addressed through policies.

Policies are usually mentioned in terms of marketing, finance/accounting, management,

production/operation, activities related to information technology, and Research and
Development. Policies may also be established at the functional level for a certain
department the divisional level or the corporate level for the entire organization.

Policies play an important role in the implementation phase because the expectations of
the organization about its managers & and employees are specified through policies.
The coordination & and consistency between different departments & and within the
departments are ensured through policies.
Remember that for developing a successful strategic management plan, these above
strategic management key terms are important to understand and you can’t develop a
successful strategic management plan without learning all these strategic management
key terms.

UNIT-1.3: THE NATURE OF STRATEGIC DECISIONS

Strategic decisions are the decisions that look after the environment in which the
operation of a firm takes place, the total resources, and the people who developed the
company. These decisions have a good impact over years and decades, and even after
the lifetime of a project.

Strategic decision refers to the identification, evaluation, and selection

of the best strategy that increases the likelihood of achieving
organizational goals. Strategic decisions are directive, rare, and
consequential.

Decision-making is the selection of the best one out of the pool of

available alternatives. And, while making a decision, several factors are
taken into consideration. Similarly, strategic decision-making is a
selection of the best out of the pool of available strategic alternatives
to achieve organizational goals and objectives most effectively. And,
for this, environment analysis, future forecasting, and strategies
evaluation are done.

Strategic decisions are made by the top level, they determine the
scope and direction of the organization and always aim at achieving a
competitive advantage. They are guided by organizational policies,
available resources, insights into strategies, long-term objectives, and
the competitiveness of the firm.

Furthermore, strategic management emphasizes making strategic

decisions. It deals with knowing organizational objectives, resource
availability, customers to be served, and competitors to be faced. It is
made by top-level management and equally influences operational-
level activities.

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Strategic decision definitions:

 “Strategic decisions deal with the long-run future of an organization and

are rare, consequential, and directive.” – Wheeler and Hunger
 “Strategic decisions are means to achieve ends. These decisions encompass
the definition of the business; products and market to be served, functions
to be performed, and major policies needed for the organization to
execute these decisions to achieve objectives.” –

Characteristics of Strategic Decision

A strategic decision is a process of selecting the best strategy for an
organization to achieve a competitive advantage against the
competitors. The characteristics or features of strategic decisions are
mentioned below.

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Directive
An organization’s long-term course is determined by strategic
decisions. To put it another way, they give a road plan for future
operations in an unpredictable environment. Strategic decisions have
far-reaching effects. It also aimed to meet the organization’s long-
term objectives.

Rare
Big decisions, such as strategic ones, require a lot of thought. They’re
only made once in a while because they’re so extensive and need so
many resources. They are critical for an organization’s long-term
growth and development. They differ from routine decisions, which
are made regularly.

Consequential
Strategic decisions are the actions and decisions taken to achieve the
long-run goal of an organization. Hence, they are result-oriented or
consequential.

Competitive Advantage
Competitive advantage is the advantage a firm gets comparatively
high over its competitors. Strategic decisions are always directed to
get a competitive advantage standing competitive with competitors. It
enables firms to be competent, sustain, and grow in a competitive
environment.

Strategic Fit
Strategic decisions are concerned with preserving strategic fit, which is
defined as the alignment of an organizational structure, policies,
resources, and competencies with market prospects. An organization’s
competitive advantage is enhanced through strategic fit.

Define Scope
Strategic decisions define an organization’s scope. They are concerned
with the actions that an organization will carry out. In other words,
they describe an organization’s product and market.

Top Management Oriented

Because strategic decisions are so important to a business, they are
made by top management with input from middle and lower
management. As a result, top management dedication and
competency are required for strategic decision-making to be effective.

Involve Resource Management

The deployment of resources over a long period is a key component
of strategic decisions. As a result, the long-term effectiveness of
strategic decisions is heavily reliant on the availability and
management of resources.

Dynamic
Because strategic decisions are made to take advantage of
opportunities in the environment, they are dynamic in nature. They are
designed to defend the organization from hazards posed by the
environment. They’re also uncertain, complicated, and risky.

Irreversible
Strategic decisions are long-term decisions. They involve resources
and efforts significantly. Hence, unlike operational decisions, they can
not be reversed easily.

]
Strategic Decision Vs. Operational
Decision
On the other hand, while strategic decisions are fundamental and
directional, operational decisions primarily affect day-to-day activity.
Strategic decisions have longer-term consequences, but operational
decisions have immediate consequences.

Strategic decisions influence the entire organization and are made in

an uncertain and ambiguous environment, whereas operational
decisions are specialized in production, human resources, marketing,
and finance.

The strategic decision can be differentiated from the operational

decision in the following ways.

Magnitude
Strategic decisions are big decisions that affect the whole organization
or a large part. And, operational decisions are regular decisions and
affect only a part of the organization.

Time-Scale
Strategic decisions set the direction for the organization over the
medium to long term whereas operational decisions direct the
organization for a short period usually less than one year.

Reversibility
Strategic decisions involve making choices and committing resources
in ways that cannot be reversed easily, on the other hand, operational
decisions can be reversed reasonably.

Why Making Strategic Decisions is

Important?
Under strategic management, several decisions are taken. They draw a
long-term roadmap of the organization. The importance of strategic
decision-making can be discussed below:

Organizational Effectiveness
Strategic decisions help organizations become more effective by
balancing their goals and resources. Organizational effectiveness
results in strategic advantages, which lead to long-term growth and
development.

Improvement in Operational Capability

Even though strategic decisions are long-term, they have a major and
direct impact on operational activity. They affect operational decisions
because they are linked to resource allocation and work procedures.
As a result, they aid in the establishment of operational effectiveness.

Competitive Advantage
Strategic decisions are always made to gain a competitive edge in
mind. Serving higher-value products at a reasonable price can provide
a competitive advantage, which is ensured by strategic decisions. It
eventually contributes to the organization’s long-term goals.

Resource Management
In strategic management, resource management is critical. Strategic
decisions guarantee that resources are available when they are
needed, that they are allocated appropriately to various units, and that
management is effective. Effective resource management improves the
capability and effectiveness of an organization.

Stakeholders’ Interest
Individuals and groups with direct or indirect concerns about the
organization’s performance are referred to as stakeholders. When an
organization’s performance meets or surpasses its expectations,
stakeholders continue to support it. The goal of strategic decisions is
to satisfy the interests of all stakeholders.

Strategic Control
The goal of strategic control is to ensure that the organization is
employing appropriate strategies for the external environment,
process, and competitive advantages. It guarantees that initiatives are
implemented effectively on an ongoing basis.

Strategic control is also used to assess how focused a company is on

the need to implement its strategies. Effective strategic control is
aided by strategic decisions.

In conclusion…
Hence strategic decision is a long-term decision an organization takes
to fulfill its long-term goals through proper evaluation of strategic
alternatives. It’s goal-directed and future-oriented. An effective
strategic decision ensures that the implementation strategy effectively
achieves competitive gain in an improved manner and ultimately
sustains it in the long run.

Characteristics/Features of Strategic Decisions

a. Strategic decisions have major resource propositions for an organization. These decisions
may be concerned with possessing new resources, organizing others, or reallocating others.
b. Strategic decisions deal with harmonizing organizational resource capabilities with the
threats and opportunities.
c. Strategic decisions deal with the range of organizational activities. It is all about what they
want the organization to be like and to be about.
d. Strategic decisions involve a change of a major kind since an organization operates in an
ever-changing environment.
e. Strategic decisions are complex in nature.
f. Strategic decisions are at the topmost level, are uncertain as they deal with the future, and
involve a lot of risk.
g. Strategic decisions are different from administrative and operational decisions.

Administrative decisions are routine decisions that help or rather facilitate strategic decisions
or operational decisions.

Operational decisions are technical decisions that help the execution of strategic decisions.

Reducing cost is a strategic decision that is achieved through the operational decision of
reducing the number of employees and how we carry out these reductions will be an
administrative decision.

The differences between Strategic, Administrative, and Operational decisions can be summarized as
follows-

Strategic Decisions Administrative Decisions Operational Decisions

Strategic decisions are long- Administrative decisions are Operational decisions are
term decisions. taken daily. not frequently taken.

These are considered where These are short-term These are medium-period-
future planning is concerned. Decisions. based decisions.
 Strategic decisions are taken These are taken according to These are taken by
by organizational mission and strategic and operational strategic and administrative
vision. Decisions. decisions.

These are related to the overall These are related to the These are related to
Counter planning of all working of employees in an production.
Organizations. Organization.

These deal with organizational These are for the welfare of These are related to
Growth. employees working in an production and factory
organization. growth.

The nature of strategic decisions in strategic management can be summarized as

follows:

1. Long-term Orientation:
 Strategic decisions have a long-term focus and are designed to guide the
organization for a considerable period, often several years or more.
2. High Impact:
 Strategic decisions significantly impact the overall direction and performance of
the organization. They influence the allocation of resources, market positioning,
and competitive advantage.
3. Uncertainty and Risk:
 Strategic decisions are made in an environment of uncertainty due to changing
market conditions, technological advancements, economic fluctuations, and
competitive dynamics. The outcomes of these decisions are associated with risks
and uncertainties.
4. Irreversibility:
 Strategic decisions often involve substantial investments of resources, and once
implemented, they may be challenging to reverse without incurring significant
costs and disruptions.
5. Cross-functional Involvement:
 Strategic decisions require input and collaboration from various departments and
levels within the organization. They integrate insights and expertise from different
functions like marketing, finance, operations, and more.
6. Non-routine and Unique:
  Strategic decisions are not routine or repetitive; they are unique to the specific
circumstances and context of the organization. Each decision requires careful
analysis and tailored solutions.
7. Multifaceted Considerations:
 Strategic decisions consider multiple aspects, including internal factors
(resources, capabilities, culture) and external factors (market trends, competitors,
legal/regulatory environment). They encompass financial, operational,
competitive, and organizational perspectives.
8. Alignment with Mission and Vision:
 Strategic decisions are aligned with the organization's mission, vision, and core
values. They ensure that the actions and directions chosen are consistent with the
overall purpose and identity of the organization.
9. Adaptability and Flexibility:
 While strategic decisions are long-term in nature, they need to be adaptable to
changing circumstances. Strategic plans must be flexible enough to evolve and
adjust based on new information or shifts in the environment.

Understanding the nature of strategic decisions is critical for organizations to approach

the strategic management process with the right mindset and tools to navigate the
complexities and dynamics of the business landscape effectively.

UNIT-1.4: The strategy managers: role and task

What does a Strategy Manager do?

Strategy managers review an organization to determine strengths, weaknesses, operational
effectiveness, and opportunities for improvement. They recommend initiatives from internal
and external factors that minimize risks and formulate plans to achieve long-term goals.
They assess organizational performance and develop achievable goals by implementing
processes that improve organizational effectiveness while building a sustainable
competitive advantage.

Strategy managers support the development of a long-term organizational strategy. They

conduct research and analysis of operational effectiveness, processes, stakeholders, and
stakeholders. They align department goals and process and resource allocation with the
organizational strategy in mind and assess competitors and market trends. They identify
threats and opportunities and present their findings, projections, and recommended actions.
They monitor and report projects and support and guide senior executives in the decision-
making process. Strategy managers need a degree in business or related fields; some
employers prefer an MBA.
What responsibilities are common for Strategy Manager jobs?
  Identify and evaluate strategic deals and partnerships that drive strategy forward.

 Develop and strengthen relationships with executives across the business.

 Support the development of monetization, product marketing, and go-to-market

plans.

 Develop and implement strategies that resonate with the target market.

 Develop and execute the strategy for each digital media channel (SEO, SEM, and
Social).

 Manage team members to deliver strategy projects correctly and on time.

 Identify opportunities and continuously manage the sales pipeline.

 Develop proposals and business models for new growth opportunities, products, and
markets.

 Conduct market research to identify selling possibilities and evaluate customer

needs.

 Be a major contributor and driver to evolve a holistic vision for performance.

 Construct financial modeling on buy, build, and partner strategy options.

 Experimentation will be necessary, and some experiments will fail.

 Manage data retention of completed projects and other records.

 Coordinate key projects with portfolio strategy dependencies across multiple

stakeholder groups.

 Manage and coach project teams to deliver complex engagements.

 Perform QA of content, logic revisions, and research requests performed by others

to ensure accuracy.

What are the typical qualifications for Strategy Manager jobs?

 Bachelor's or Graduate's Degree in business, business administration, computer

science, or engineering or equivalent experience.

 Prior experience in a consultant position.

 Has solid leadership skills and pays strict attention to detail.

  A problem solver and decision maker who strives for continuous improvement.

 Has mastery of systems such as Agile, Oracle ERP, and cloud software.

 Can collaborate with other team members to strive for sound outcomes.

What Is a Strategy Manager? Key Duties

and Responsibilities

Strategic managers are the key planners, analyzers, and risk leaders who establish
strategic plans in a business. They also handle oversight and development of corporate
strategies to support business growth and stability. In this article, we review what a
strategic manager is, their roles and responsibilities, qualifications, and requirements.

What does a strategic manager do?

A strategic manager is responsible for reviewing a business’ current strategy and goals
to identify its potential strengths, weaknesses, and opportunities for improvement. They
typically lead and manage one to several corporate departments to meet specific
challenges and goals including production, finance, human resource, and marketing
departments.

Strategic managers recommend highly detailed plans and set goals based on their
assessments and help implement these strategies through hiring, training,
presentations, and development.

The essential roles of a strategic manager

The overarching role of a strategic manager is to develop, implement, and manage a
business's long-term strategy. Here are some key responsibilities of strategic managers
that help them meet this goal:

1. Planning
Strategic planning is the process of identifying the specific time and resources needed
to meet your business goal. A strategic manager develops the plan that will be
implemented by reviewing and establishing strategic priorities and converts them to
quantitative and actionable plans.

Proper strategic planning provides focus, improves operations, increases collaboration,

and sets priorities.

2. Risk management

Risk management is evaluating potential threats and establishing plans to minimize

them. This process helps business leaders understand and manage expectations,
which helps improve relationships with suppliers, customers, and employees. Strategic
managers develop and recommend viable scenarios for mitigating any potential risks
and develop risk reports for the senior management and business leadership.

3. Performance management

Strategic managers develop and manage their business's key performance indicators
(KPI) to forecast and analyze company performance. This, in turn, helps facilitate
accurate budgeting, resource planning, and goal-setting.

4. Coaching

Strategic managers coach department leaders to help them implement the plan and
meet their goals. They provide support in strategizing individual departments and
review, analyze, and manage all existing department strategies to ensure all
departments align with the business's key strategies.

5. Collaboration

Collaboration is the act of working together for a set goal. Strategic managers
collaborate with the senior executive leadership in setting the businesses' agenda and
vision. They work with planning teams and clients to develop and implement the plan
and then, collaborate with departments that will help them implement, manage, and
assess the success of the plan.
6. Data analysis

By analyzing the data results of their plans, strategic managers can see what worked
and what may be opportunities for improvement. Strategic managers also use analytics
for benchmarking initial results to measure long-term market trends which aid in making
financial and resource decisions.

7. Crisis management

During an economic breakdown and financial crisis, strategic managers adopt strategies
that try to raise customer value and cut costs. They also analyze the major cause of the
crisis and provide a constructive solution and preventative plan for the future.

8. Creative problem solving

Strategic managers overcome political, behavioral, and systematic barriers to enable

creativity, change, and business growth. They take unique initiatives that help provide
alternative solutions to existing problems. They also identify gaps in the business and
advise on the corrective actions necessary.

A strategic manager's role is to enable innovation and creativity to develop new winning
strategies.

9. Ethics development

Business ethics are the principles governing employee behavior in an organization. It is

the strategic manager's responsibility to develop a culture of ethical behavior in the
business to support continued growth, productivity, and positive employee and client
relationships. Good ethics promote:

 Employees' health by ensuring they work in a conducive environment

 Fair treatment of all employees regardless of race, nationality, gender,
or difference
 Production of quality products by setting standards
 Reduced crimes in the business by imposing punishments on instigators
of violence

10. Market leadership

Strategic managers design and implement competitive products and actions to acquire
the most clients and sell the most goods in their market. They oversee the market status
and recommend the best actions to adopt to dominate the market.

Building market leadership entails other actions such as:

 Assisting in employee training

 Recruitment of new candidates
 Retention of employers and working strategies
 Performance evaluation
 Termination of worker's services when no longer needed

11. Creating value

Creating value for a business is ensuring its revenue always exceeds its expenses. The
primary aim of a business entity is value creation. Strategic managers ensure their
strategies in a business earn profit and promote economic development.

12. Globalization

The strategic manager needs to be able to assist a company in fitting into the current
dynamic economy by identifying and implementing relevant methods for increased
business efficiency.

Qualifications for a strategic manager

If you are considering becoming a strategic manager, here are common requirements:

1. Education

To become a strategic manager, you need to have a bachelor's degree in business or

any other related field. Majoring in business administration, finance, economics or
management can prepare you for a job in strategy management.

Having a master's degree in a business-related course will make you more competitive
as a job candidate.

2. Experience

A strategic manager's position requires you to have at least three to five years of
strategic management experience in one or more of the following:
  Management consulting
 Business administration
 Strategic planning

A good understanding of business procedures and operations is necessary. Proficiency

in MS Excel, PowerPoint, and MS Word will help you create and present analysis
reports.

3. Skills

Strategic managers should be able to demonstrate the following skills:

Communication skills

The strategic management position is collaborative and demands great communication

in speech and writing. As business leaders, strategic managers need to inform and
instruct all employees. Proper communication will determine the effectiveness of the
instructions they give.

Exceptional communication skills are essential when interacting with consumers,

gathering information, expressing oneself, and preparing business reports.

Analytical skills

Strategic managers need to convert raw information into applicable strategies. They
should also be able to perform various standard analyses in the business, such as:

 Competitive analysis: Assesses the strengths and weaknesses of their

competitors
 Performance analysis: Analyzes the business progress, systematically.
 Market analysis: Gathers information on conditions affecting the
marketplace

Interpersonal skills

Interpersonal skills are behaviors and abilities that help you manage emotions and cope
with challenges. Strategic managers need to be proactive, demonstrate outstanding
problem-solving skills, and work in a group setting.
Strategic managers should be exemplary leaders who inspire and motivate team
performance. As team leaders, strategic managers should strive to build strong and
lasting connections with others.

Strong leadership skills

Strong leadership is the ability to motivate, inspire, encourage, and challenge the team
you lead to maximize their production. Developing effective strategies for an entire
company and ensuring their implementation within a set timeline requires quality
leadership.

Strategic management candidates need to have strong leadership qualities to help them
deal with potentially difficult strategies, stiff competition, financial crises, or business
losses.

Organizational skills

Organizational skills enable you to prioritize, plan, and achieve set goals. Strategic
managers require strategic organizational skills to structure and rank priority tasks to
meet strict deadlines.

Project management skills

Project management is applying knowledge, tools, and techniques in a project's

activities to meet its requirements. Strategic managers should be able to apply their
skills and experience to help the business achieve its goals.

Problem-solving skills

Some situations in businesses require quick and sound decisions to avoid losses.
Strategic managers need to be able to make difficult decisions quickly and accurately
for both immediate goals and the well-being of their company.

UNIT-1.5: Strategic planning and its benefits and pitfalls

What is strategic planning?

Strategic planning is the process that generates new ideas and actions that
provide a central structure for the company to project its future. It is with him
that the company decides today what it wants to be in the future, and how it
intends to get there.
Strategic planning is the art of creating specific business strategies,
implementing them, and evaluating the results of executing the plan,
regarding a company’s overall long-term goals or desires. It is a concept that
focuses on integrating various departments (such
as accounting and finance, marketing, and human resources) within a
company to accomplish its strategic goals. The term strategic planning is
essentially synonymous with strategic management.

Advantages
Facilitates communication between managers. One of the goals of strategic
managers is to facilitate the collaboration of functional managers to achieve synergy
between different parts of the organization. Managers in finances, marketing,
operations, and human resources are essential for an organization but they often
compete rather than collaborate. An even worse situation is with separate SBUs.
Strategic planning is in place to facilitate the collaboration between these managers.

Identifies strategic goals and strategic intent. CEOs are usually the people who
create goals and envision the future of the company. Nonetheless, they are often
engaged in many other activities and have less time to search for the best strategic fit.

Reduces resistance to change. It is the strategic planner's job to inform the whole
organization of strategic changes, the company's plans, current situation implications,
and what changes are expected to be done. A thorough explanation of this information
to managers at every level reduces resistance to change as managers are less
uncertain about the future.

. Improves resource allocation. New products, services, strategies, goals, or

objectives require resource allocation (moving people from one team to another or
moving the facilities into another country), which is done more efficiently when aligned
with strategic objectives.
.Leads to sustainable competitive advantage. Competitive advantage is often
achieved without strategic planning but if the company wants to achieve sustainable
competitive advantage it has to plan strategically.

Sense of direction

Sstrategic planning helps to create a sense of direction and focus. It helps to

ensure that everyone in the organization is working towards the same goals
and that their efforts are being directed toward the most important tasks. This
can help to improve employee morale.
Risk management

No business is without risks. Therefore, organizations need to have some

mechanisms in place to identify these risks. One of the most important
advantages of strategic planning is that it helps organizations identify and
manage risks.

Creativity

Strategic planning forces managers to think. It can encourage creativity and

initiative by tapping the ideas of the management team (BPP Learning Media,
2010). It may include both top-down and bottom-up approaches to engage
employees in the strategic planning process.

Clarification of aims and objectives

Aims and objectives may sometimes need clarity. Strategic planning clarifies
the aims and objectives of an organization. It requires planners to define what
they would like to achieve.

Identifying resistance to change

Managers entrusted with strategic planning need to inform the whole

organization of the aims and objectives, strategic changes, plans, etc. This
dissemination of information helps them identify resistance to change and
take remedial actions as necessary.
Collaboration

Organizations consist of different departments and carry out several tasks.

Consequently, they need collaboration and cooperation across the spectrum.

However, managers in finance, marketing, operations, HRM, etc. often

compete rather than collaborate. So, what is the solution? The solution is
strategic planning as it facilitates collaboration among the managers.

Allocation of resources

Organizations need to allocate resources e.g. people, money, land, and time to
implement strategic plans. Moving people from one team to another or
moving the facilities from one country to another may be necessary
sometimes. This allocation of resources helps organizations identify the right
resources for the right place which is key to the success of strategic planning.

Disadvantages
1. Costly to perform for small and medium businesses. Strategic planning,
the same as marketing or proper human resource management, adds a lot of
expenses to an organization. Managers or strategic planners have to be
hired, additional efforts are required towards the analysis of external and
internal environments and some tools have to be designed to properly
implement the strategic planning process. Although all of this is done to some
extent by all organizations (who doesn't monitor firm performance or analyze
competitors?), mainly the large enterprises are the ones capable of hiring
competent personnel to implement strategic plans.

2. The process is very complex. The strategic planning process consists of

many steps that are connected and must be constantly adjusted. Some
unexpected factors also appear that may change the whole strategy and as a
result, the strategic planning process.

3. Low rate of successful implementation. Due to its complexity and heavy

commitment to strategic goals, strategic planning is rarely implemented
successfully. Often, poor implementation is the reason for failure, although it
is more often the case of misaligned operational and strategic goals.
 Vulnerable to outside influences
Strategic plans often fail due to outside influences such as changes in
the economic environment, competitor actions, and/or technological
change. Macro-environmental factors may sometimes change extremely
rapidly which may frustrate any strategic plans.

 Costly and time-consuming

If organizations carry out strategic planning thoroughly, it becomes a
costly, rigid, and time-consuming process. It may sometimes take five or
more years to implement a strategic plan. Consequently, the benefits of
strategic planning may not be immediately visible.

Organizations must dedicate resources to analyze the current situation,

forecast changes, and create plans to respond to them. This can be
difficult for smaller organizations, especially if they lack the resources or
expertise needed to develop a comprehensive plan.

 Complexity
Strategic planning is a very complex process. It involves addressing
several things: hence the complexity.

 Lack of success
According to several studies cited in Olson (2022) 60-90% of strategic
plans never fully launch. When implemented, some of them fail as well.

 Components of a good strategic plan

Creating a successful strategic plan requires careful consideration and a
thorough understanding of the organization and its goals. Here are
some of the key components of a good strategic plan:

 Mission statement
A mission statement should clearly articulate the organization’s purpose
and goals.

 Aims and objectives

 Clear aims and objectives. Objectives should follow the SMART criteria
i.e. Specific, Measurable, Achievable, Realistic, and Time-bound.

 Strategies
Strategies should be developed to achieve the aims and objectives. They
should be designed to take advantage of the organization’s strengths
and address its weaknesses.

 Action plans
Action plans should be developed to ensure that the strategies are
implemented promptly. They should include a timeline, a budget, and a
list of tasks to be completed.

 Evaluation
Strategic plans should be evaluated regularly to ensure that they are still
relevant and are achieving the desired results.