Program : MBA

Semester : IV
Subject Code : MB0052
Subject Name : Strategic Management and Business Policy
Unit number : 14
Unit Title : Challenges in Strategic Management
Lecture Number : 14
Lecture Title : Challenges in Strategic Management

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 Unit-14 Challenges in Strategic Management

Objectives

Objectives :

The objective of this lecture is to:

• Identify the challenges faced by an organisation in strategic management.
• Understand dealing with strategic management issues.
• Understand the challenges and implications of strategic management.
• Summarise the TQM concepts.

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 Unit-14 Challenges in Strategic Management

Lecture Outline

• Introduction and Key Challenges

• Global Competitiveness
• Issues and Methods to Tackle
• Role of Flexibility
• Quinn’s Incremental Model
• Uncertainty, Crisis and Chaos
• Implications
• E - Business and TQM
• Summary
• Check Your Learning
• Activity

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 Unit-14 Challenges in Strategic Management

Introduction and Key Challenges

Strategic management has created a framework in business and technology.

The key challenges faced by strategic management are:

•Growth and Value
•Focus and Change
•Future and Knowledge
•Time

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 Unit-14 Challenges in Strategic Management

Global Competitiveness

Global competitiveness is achieved by an organisation's strategic

management.

The advantages of global competitiveness are:

•Efficiency
•Strategies
•Risks
•Learning

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 Unit-14 Challenges in Strategic Management

Issues and Methods to Tackle

Following are the issues in dealing with strategic change:

•Cultural problems
•Political problems
•Technical problems

The methods to tackle change are:

•External interface
•Mission and Strategy
•Strategy processes and Tasks
•Prescribed networks
•Organisational process

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 Unit-14 Challenges in Strategic Management

Role of Flexibility

Flexibility supports competence building and leveraging.

Various modes of competencies include:
•Cognitive flexibility for alternative management processes.
•Coordination flexibility to configure and deploy resources.
•Flexibility of resources to be used in alternative operations.
•Operating flexibility in applying skills and capabilities to available resources.

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 Unit-14 Challenges in Strategic Management

Quinn’s Incremental Model

Quinn's incremental model is based on need for incremental processes

and primary mode in strategy setting.

The advantages of Quinnn’s incremental model are:

•Improves quality of information.
•Deals with personal resistance and political pressure.
•Creates organisational awareness, understanding and psychological
commitment.
•Reduces uncertainties and allows interactive learning between
organisation and various environments.
•Improves quality of strategic analysis.

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 Unit-14 Challenges in Strategic Management

Uncertainty, Crises and Chaos

Uncertainty: The organisations face varying degree of uncertainties during

strategy formulation.
The types of uncertainty are:
•Demand uncertainty
•Supply uncertainty
•Competitive uncertainties and externalities

Crises and Chaos: It arises due to internal leadership, resource sharing and
so on.
The types of crises are:
•Sudden crises
•Smouldering crises

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 Unit-14 Challenges in Strategic Management

Implications

Various implications of strategic management are: Liberalisation, Privatisation

and Globalisation (LPG).

Liberalisation:
•Refers to relaxation of government restrictions in social and government
policies.
•Reduces tariffs and restrictions on flow of goods and services.
•Facilitates quick adaptation to changes by learning.
•Helps in introducing many divisions to manage international markets.

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 Unit-14 Challenges in Strategic Management

Implications contd…

Privatisation:
•Refers to transfer of service functions or assets from public to private
ownership.
•It includes franchising, contracts, leasing and divesture.
•Reduces burden on financial reserves, increase profits.
•Improves quality of decision making.
•Encourages monopoly.

Globalisation:
•Refers to integration of national economies into international economy.

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 Unit-14 Challenges in Strategic Management

E - Business and TQM

E-business: It is used to enhance a business. The processes enhanced in

an e-business are:
•Production process
•Customer focused process
•International management process

TQM: It is a systematic approach to redefine quality and meet

challenges.
•Focuses to obtain continuous improvement, commitment and leadership
of top management.

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 Unit-14 Challenges in Strategic Management

Summary

•Strategic management is very important in all aspects of the

organisation.
•Efficiently managing the challenges like growth, value, focus and change
is the key success of an organisation.
•Major challenges and implications depends on LPG, e-commerce, TQM
and so on.

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 Unit-14 Challenges in Strategic Management

Check Your Learning

1. Name four challenges faced by an organisation.

Ans. Growth, Value, Change, Focus
2. Why an organisation faces risks?
Ans. Risks happen due to the disassociation of business cycles among
various countries.
3. What are smouldering crises?
Ans. Smouldering crisis is a serious problem not known to the
organisation, it generates negative news coverage and could result in
penalties.

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 Unit-14 Challenges in Strategic Management

Activity

Refer http://tejc.tripod.com/jit.htm and identify the reason for adopting

Just in time Total Quality Management (TQM) by Toyota to gain
manufacture quality products. What advantages did Toyota gain by
adopting Just in Time TQM approach.

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