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STRATEGIC MANAGEMENT

Introduction to strategicmanagement and business

policy

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Learning objectives

Describe the historical development of strategicmanagement and business policy in the world and inIndia

Discuss the likely future developments in the field of strategic management and business policy

Explain the concept of strategy and its limitations

Describe the process of strategic decision making

Discuss the various schools of thought on strategyformation

Describe the strategic management process

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Evolution of strategic management andbusiness policy

 The genesis of strategicmanagement and business policy

Evolution based on managementpractices

Historical perspective

Pointers to the future

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Vision and

Mission

Goals and

Objectives

Strategy:

Arenas

Vehicles

Differentiators

Staging

Economic logic

Implementation Levers

and Strategic

Leadership

Internal and External

Strategic Analysis

Hambrick and Fredrickson model of strategic management

D. C. Hambrick & J. W. Fredrickson: “Are you sure you have a strategy?” (2001). Academy of Management Executive Vol. 15, No. 4, pp. 48-59

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Business policy defined

Business policy, as defined by Christensen and others, is"the study of the function and responsibilities of seniormanagement, the crucial problems that affect success inthe total enterprise, and the decisions that determine the

direction of the organisation and shape its future. Theproblems of policy in business, like those of policy inpublic affairs, have to do with the choice of purposes, themoulding of organisational identity and character, thecontinuous definition of what needs to be done, and themobilisation of resources for the attainment of goals in

the face of competition or adverse circumstance”.

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The concept of strategy

A strategy could be:

plan or course of action or a set of decision rules making a pattern orcreating a common thread;

the pattern or common thread related to the organisation's activities

which are derived from the policies, objectives and goals; related to pursuing those activities which move an organisation from

its current position to a desired future state;

concerned with the resources necessary for implementing a plan orfollowing a course of action; and

connected to the strategic positioning of a firm, making trade-offsbetween its different activities, and creating a fit among theseactivities.

the planned or actual coordination of the firm's major goals andactions, in time and space that continuously co-align the firm with itsenvironment.

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Levels at which strategyoperates

CorporateOffice

SBUA

SBUB

Finance Marketing Operations HRM Information

LEVELS OF MANAGEMENT LEVELS OF STRATEGY

CORPORATE CORPORATE-LEVEL

SBU BUSINESS-LEVEL

FUNCTIONAL

SBUC

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Strategic decision-making

Objectives to be achieved aredetermined;

Alternative ways of achieving theobjectives are identified;

Each alternative is evaluated in

terms of its objective-achievingability; and

 The best alternative is chosen.

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Issues in strategic decision-making

Criteria for decision-making

Rationality in decision-making

Creativity in decision-making

Variability in decision-making

Person-related factors in decision-making

Individual versus group decision-making.

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Schools of thought on strategyformation

 The prescriptive schools

 The descriptive schools

 The integrative school

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Strategic managementdefined

Strategic management is defined asthe dynamic process of formulation,

implementation, evaluation andcontrol of strategies to realise theorganization’s strategic intent. 

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Four phases in strategicmanagement

Formulation of 

strategies

Implementation of 

strategies

Strategic

evaluation

Strategic control

Establishment of 

strategic

intent

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Comprehensive model of strategic management

Strategy Formulation

Environmental Organisational

Appraisal Appraisal

SWOT Analysis

Corporate-level Strategies

Business-level Strategies

Strategic analysis and choice

Strategic plan

Strategic Intent

Vision

Mission

Business definition

Business model

Objectives

Strategy

Implementation

Project

Procedural

Resource allocation

Structural

Behavioural

Functional &

Operational

Strategic control

Strategic

Evaluation