STRATEGIC MANAGEMENT

MANAGEMENT FUNCTIONS

Planning
Planning Organizing
Organizing

Management
Management
Functions
Functions

Controlling
Controlling Leading
Leading
Planning

 Planning is deciding in advance:

 What to do
 Who to do
 How to do
 Why to do
 where to do
ORGANIZING

 involves developing an organizational structure and allocating human resources to ensure

the accomplishment of objectives.
 Organizing also involves the design of individual jobs within the organization.
DIRECTING/LEADING

 a process in which the managers instruct, guide and oversee the performance of the
workers to achieve predetermined goals. Directing is said to be the heart
of management process. Planning, organizing, staffing have got no importance if
direction function does not take place.
CONTROLLING

 setting standards, measuring actual performance, and taking corrective action. An easy way
to summarize the steps of control management is like this: Actual performance is
compared with planned performance.Mar
ATTRIBUTES OF A MANAGER

 Whatever the role of the manager or whether in the private or public sector, in order to
perform the process of management and the execution of work, the manager requires a
combination of technical skills, social and human relations skills, and conceptual skills.
 As the manager progresses through the organisational hierarchy, he will require and use
more of the conceptual skills and relatively less of the technical competence.
THE LION AND THE GAZELLE

Copyright 2007 Prentice Hall

1-9 Philosophy

 What's the use of running if you are not on the right road- German proverb
 If you do not know where you come from, you do not know where you stand, if you do
not know where you stand, you do not know where you go- Chinese Proverb
 To run in a right road to reach your destination is strategy.

Strategic Management
1-10 What you will learn?

 What is a strategy?
 How to create strategies that lead to superior performance?
 How to implement?
 How you have to relate to the environment?
 Why strategy?

Strategic Management
STRATEGY
 A plan of action or policy designed to achieve a major or overall aim.
 Alfred Chandler(1962)Strategy is the determinator of the basic long-term goals of
an enterprise, and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals;
 Henry Mintzberg (1979) Strategy is a mediating force between the organization and
its environment: consistent patterns in streams of organizational decisions to deal
with the environment.
 STRATEGY

Copyright 2007 Prentice Hall

 The art of planning and directing overall military operations and
movements in a war or battle.

 C.K. Prahlad (1993) Strategy is more then just fit and allocation of
resources. It is stretch and leveraging of resources

 Michael Porter (1996) Strategy is about being different. It means

deliberately choosing a different set of activities to deliver a
unique mix of value
Ch STRATEGY
1-
 Strategy refers to a complex web of thoughts, ideas, insights, experiences, goals,
13 expertise, memories, perceptions, and expectations that provides general guidance
for specific action in pursuit of particular ends. Nations have, in the management of
their national policies, found it necessary to evolve strategies that adjust and
correlate political, economic, technological, and psychological factors, along with
military elements.
Ch
1- STRATEGIC MANAGEMENT
14

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 What is Management?
 the process of dealing with or controlling things or people. Management is all about plans and
actions
 What is Administration?
 It is concerned with framing policies and setting objectives.
Ch
1- STRATEGIC MANAGEMENT
15

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 A set of managerial decisions and actions that determine the long-term performance of an
organization.
Ch
Strategic Management –
1-
16 Defined

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Art & science of formulating,
implementing, and evaluating, cross-
functional decisions that enable an
organization to achieve its objectives
Ch
Integrating Intuition and
1-
17 Analysis

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The strategic management process attempts to organize quantitative and
qualitative information under conditions of uncertainty
Ch
Integrating Intuition and
1-
18 Analysis

Copyright 2007 Prentice Hall

Intuition is based on:
 Past experiences
 Judgment
 Feelings

Intuition is useful for decision making in:

 Conditions of great uncertainty
 Conditions with little precedent
Ch
Strategic Management
1-
19

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In essence, the strategic plan is a company’s game plan
Strategic Management
achieves a firm’s success
through integration ––

Management Marketing

Finance/Accounting Production/Operations

Research & Development MIS

1-21

Strategic Management 8/10/2011

1-22 Strategic Planning
 Rational planning by top management?

Basic Strategic Planning Model

Defining the Mission and Setting Top-Level Goals

External Analysis of Opportunities and Threats

Internal Analysis of Strengths and Weaknesses

Selection of Appropriate Strategies

Implementation of Chosen Strategies

Strategic Management 8/10/2011
Ch Issues in Strategy
1- Formulation
23

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New
Newbusiness
business
opportunities
opportunities
Businesses
Businessesto
toabandon
abandon
Allocation
Allocationof
ofresources
resources
Expansion
Expansionorordiversification
diversification
International
Internationalmarkets
markets
Mergers
Mergersororjoint
jointventures
ventures
Avoidance
Avoidanceofofhostile
hostile
takeover
takeover
Ch
1- Strategy Implementation
24

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Annual Objectives

Policies

Employee Motivation

Resource Allocation
Ch Strategy
1- Implementation
25

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Action
ActionStage
Stageof
ofStrategic
Strategic
Management
Management––

Most
Mostdifficult
difficultstage
stage
Mobilization
Mobilizationofofemployees
employees& &
managers
managers
Interpersonal
Interpersonalskills
skillscritical
critical
Consensus
Consensusonongoal
goalpursuit
pursuit
Ch
1- Strategy Evaluation
26

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Internal Review

External Review

Performance Metrics

Corrective Actions
Ch Strategy
1- Evaluation
27

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Final
FinalStage
Stageof
ofStrategic
Strategic
Management
Management

Subject
Subjecttotofuture
futuremodification
modification
Today’s
Today’ssuccess
successno
noguarantee
guarantee
of
offuture
futuresuccess
success
New
New& &different
differentproblems
problems
Complacency
Complacencyleads
leadsto
todemise
demise
Ch
Prime Task of
1-
28 Strategic Management

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Peter Drucker: -- Think through the
overall mission of a business. Ask the
key question: “What is our Business?”
Ch
Integrating Intuition and
1-
29 Analysis

Copyright 2007 Prentice Hall

The strategic management process attempts to organize quantitative and
qualitative information under conditions of uncertainty
Ch
Integrating Intuition and
1-
30 Analysis

Copyright 2007 Prentice Hall

Intuition is based on:
 Past experiences
 Judgment
 Feelings

Intuition is useful for decision making in:

 Conditions of great uncertainty
 Conditions with little precedent