Strategic Management

Ahmad A.
Maiyaki, PhD
aamaiyaki.bus@buk.edu.ng
What is Strategy??
The term strategy‘ is derived from the Greek word
strategos, which means generalship – the direction of
military force, as distinct from the policy governing
its deployment.
Therefore, the word strategy‘ literally means the art
of the general (military manoeuvre).
In biz, it generally means competitive moves by
companies and their business approaches that
managers employed to attract and please customers,
compete successfully, grow the biz, conduct
operations and achieve goals
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It’s defined as “a unified, comprehensive and
integrated plan that relates to the strategic
advantages of the firm to the challenges of
the environment”
It’s design to ensure that the basic objectives
of the enterprise are achieved through proper
execution by the organisation

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Chandler defined strategy as: The determination of
the basic long-term goals and objectives of an
enterprise and the adoption of the courses of action
and the allocation of resources necessary for carrying
out these goals
The common thread among the organisation‘s
activities and product-markets ….that defines the
essential nature of business that the organisation
was or planned to be in future (Ansoff, 1965)

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 Art & science of formulating,
implementing, and evaluating, cross-
functional decisions that enable an
organization to achieve its objectives
The set of decisions and actions that result
in the formulation and implementation of
plans designed to achieve a company’s
objectives.
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Various definitions show strategy
as:
a plan or course of action or a set of decision
rules forming a pattern or creating a common
thread;
the pattern or common thread related to the
organisation‘s activities which are derived
from its policies, objectives and goals;
related to pursuing those activities which
move an organisation from its current
position to a desired future state;
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concerned with the resources necessary
for implementing a plan or following a
course of action; and
connected to the strategic positioning of
a firm, making trade-offs between its
different activities, and creating a fit
among these activities.

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Critical Tasks of Strategic
Management
1. Formulate the company’s mission
2. Conduct internal analysis
3. Assess the company’s external environment
4. Analyze company’s options
5. Identify most desirable options
6. Select long-term objectives and grand strategies
7. Develop annual objectives and short-term
strategies
8. Implement the strategic choices
9. Evaluate success of the strategic process
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Dimensions of Strategic
Decisions
Strategic issues
• Require top-management decisions
• Require large amounts of the firm’s resources
• Often affect the firm’s long-term prosperity
• Are future oriented
• Usually have multifunctional or multibusiness
consequences
• Require considering the firm’s external
environment

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Characteristics of Strategy
1. Long term in nature: The plan can be
made in a short time, but the effect or
impact it has on the organization is in the
long term or in the foreseeable future.
2. Strategy contains elements of uncertainty
3. It is directed towards the goals of the
organization
4. Dynamic in nature
5. Strategy are normally complex
6. Strategy affects the whole organization
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Strategy formulators
The ideal strategic management team includes
• Chief executive officer (CEO)
• Product managers
• Heads of functional areas
The strategic management team obtains input
from
• Planning staff
• Lower-level management and supervisors
Role of CEO
• Provides long-term direction
• Assumes ultimate responsibility for firm’s success
• Solicits guidance from Board of Directors

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 Benefits f Strategic Management

Enhances the firm’s ability to prevent problems

Emphasizes group-based strategic decisions likely to be based on
best available alternatives
Improves employees’ understanding of the productivity-reward
relationship
Reduces gaps/overlaps in activities among employees as their
participation clarifies differences in roles

Resistance to change is reduced

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Risks of Strategic Management
Time involved may negatively impact
operational responsibilities of managers
Lack of involvement of strategy makers
in strategy implementation may result
in shirking of responsibility for strategic
decisions
Potential disappointment of employees
over unattained expectations requires
managerial time and training
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Strategic Management Process
Company Mission
• This clearly explain why org. exists and what it will
be doing
• Thus, goals are set to be achieved in medium to
long term
• Specifies unique purpose of company
• Identifies scope of operations
• Describes product, market, and technological
areas of emphasis
• Reflects values and priorities of decision makers
• Expresses approach to social responsibility efforts
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Environmental analysis to:
Identify changes in the Environment
Identify own strengths and weaknesses
Identify present and future threats and
opportunities
Internal Analysis
• Assesses company’s strengths and weaknesses
• Depicts quantity and quality of company’s
financial, human, and physical resources
• Contrasts past successes and concerns with
current capabilities to identify future capabilities
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External Environment
• Aims at understanding opportunities and threats
• Consists of all conditions and forces affecting
firm’s strategic options and define its competitive
situation
• Assessing the influence of PESTEL
• Includes three interactive segments – remote,
industry, and operating environments
• Competitive structure of the industry, the
competing firms and the competitive position are
assessed
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Strategic Alternatives and Choice
• Involves generating series of options vis-à-vis
environmental assessment
• Incorporates screening process based on mission to
generate possible and desired opportunities
• To build organisational strengths in order to exploit
opportunities and appreciate weaknesses and to
minimise threat
• Results in selection of options from which a strategic
choice is made
• Examples of corporate strategies: vertical
integration, diversification, strategic alliance, M & A,
Joint ventures etc
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Strategy implementation: Putting strategy
into action and is done as follows:
Designing appropriate structure
Allocation of duties, responsibilities, and
authourity across the ranks and files of org.
E.g. of structure: tall or flat structures, centralized
and decentralized decision making, autonomous
and semi-autonomous units

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Designing control systems
To determining the effectiveness of
strategy and whether everything is on tract
The control may be related to: input,
output or bureaucratic control system
Matching strategy, structure and control
For effective strategy

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Feedback

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Implications of Viewing Strategic
Management as a Process
 Changes in any one component will
affect other components
 Strategy formulation and
implementation are sequential
 Necessity of feedback from
institutionalization, review, and
evaluation to early stages of process
 Need to regard it as dynamic, involving
constant changes in interdependent
strategic activities 21