introduction to strategic management

1.STRATEGIC MANAGEMENT:

The strategic management process is the set of activities that firm managers undertake to put their firms in the best possible position to compete successfully in the marketplace. Strategic management is made up of several distinct activities: developing the firm’s vision and mission; strategic analysis; developing objectives; creating, choosing, and implementing strategies; and measuring and evaluating performance.

2.CONCEPT OF STRATEGY

We may define the term ‘strategy’ as a long-range blueprint of an organization’s desired image, direction and destination, i.e., what it wants to be, what it wants to do, how it wants to do things, and where it wants to go. Igor H. Ansoff: The common thread among the organization’s activities and product-markets that defines the essential nature of business that the organization has or planned to be in future.

William F. Glueck: A unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved.

In large organisations, strategies are formulated at:

1. Ø The corporate,
2. Ø Divisional, and
3. Ø Functional levels

3. TYPES OF STRATEGY:

Strategy is partly Proactive and partly Reactive: A company’s strategy is typically a blend of:

1. Ø Proactive actions on the part of managers to improve the company’s market position and financial performance.
2. Ø Reactions to unanticipated developments and fresh market conditions in the dynamic business environment.

4. THE MAJOR BENEFITS OF STRATEGIC MANAGEMENT ARE:

1.  It helps define the goals and mission
2.  Helps organisations to be proactive instead of reactive in shaping its future
3.  Provides frameworks for all major decisions of an enterprise
4.  Seeks to prepare the organisation to face the future
5.  Serves as a corporate defence mechanism against mistakes and pitfalls
6. Enhance the longevity of the business
7.  Helps the organisation to develop certain core competencies and competitive advantages

5. LIMITATIONS OF STRATEGIC MANAGEMENT:

1.  Environment is highly complex and turbulent.
2.  Time-consuming process
3.  Costly process
4.  Difficult to clearly estimate the competitive responses

6.STRATEGIC INTENT

Strategic intent can be understood as the philosophical base of strategic management.

1. Vision:

       Blueprint of the company’s future position.

       Glimpse of what the organisation would like to become in future. Every sub system of the organisation is required to follow its vision.

2. Mission:

         Mission delineates the firm’s business, its goals and ways to reach the goals

         A mission statement helps to identify, ‘what business the firm undertakes.’

3. Goals and Objectives:

          These are the end results which are to be attained with the help of an overall plan, over the particular period.

4. Values/ Value System:

Collins and Porras succinctly define core values as being inherent and sacrosanct; they can never be compromised, either for convenience or short-term economic gain

7. LONG-TERM OBJECTIVES IN SEVEN AREAS:

1.  Profitability
2.  Productivity
3.  Competitive Position
4.  Employee Development
5.  Employee Relations
6. Technological Leadership
7.  Public Responsibility

*Short-range objectives can be identical to long-range objectives

8. MAIN LEVELS OF MANAGEMENT:

1.  Corporate level
2.  Business level
3.  Functional level

8. NETWORK OF RELATIONSHIP BETWEEN THE THREE LEVELS

1. Functional and Divisional Relationship:

1.  Independent relationship,
2.  Business level manager, reporting directly to the business head, who is a corporate level manager

2.Horizontal Relationship:

1.  All positions, from top management to staff-level employees, are in the same hierarchical position
2.  It is a flat structure where everyone is considered at same level
3.  More suitable for start-ups

3.Matrix Relationship:

1.  Grid-like structure
2.  Built for temporary task-based projects
3. Helps manage huge conglomerates with ease
4.  More than one business level managers for each functional level teams