Transcript
Strategic ManagementStrategic ManagementBHRM 31124BHRM 31124
R.A.Ishanka ChathuraniLecturer (prob)Department of Human Resource ManagementFaculty of Commerce & Management StudiesUniversity of Kelaniya
Nature and Scope of Nature and Scope of Strategic Management Strategic Management Learning OutcomesDefine what is meant by strategic
managementUnderstand the dimensions of
strategic decisionUnderstand the benefits of
strategic management Explain how strategic priorities vary
by level; Corporate level, Business level and Operational level
What is Strategic What is Strategic Management?Management?
Strategic management understands the strategic management position of an organization, strategic choices for the future and turning strategy into action. (Johnson & Scholes,2008)
Strategic management is the term that is now preferred over earlier terms such as corporate planning and strategic planning
Cont…Cont… What is Strategic What is Strategic Management?Management?
Thus Strategic management is , an art and science of formulating, implementing and evaluating cross functional decisions that enable of an organization to achieve its objectives (Fred R.David,2006)
Dimensions of Strategic Dimensions of Strategic DecisionDecision
Strategic issues require Top-management support
Strategic issues involves allocation of large amount of resources
Strategic issues tend to have a significant impact on the long term prosperity of the firm
Strategic issues are future orientedStrategic issues have company-wide
consequencesStrategic issues necessitate considering
factors in the firm’s external environment
Benefits of Strategic Benefits of Strategic ManagementManagement
Strategic management allows an organization to be proactive than reactive in shaping its own future◦Financial Benefits
Improvements in sales Profitability Productivity
Non-Financial Benefits
It allows to identification, prioritization and exploitation of opportunities
It provide an objective view of management problems
Represent a framework for improved coordination and control of activities
Minimize the effect of adverse condition and changes Allows major decisions to better support established
objectives Allows more effective allocation of time and
resources to identified opportunities Allows fewer resources and less time to be devoted
to correcting erroneous and adhoc decisions Create a framework for internal communication
among personnel Helps integrate the behaiour of individuals into a
total effort
Guidelines for Effective Guidelines for Effective Strategic Management Strategic Management
Open mindednessResource boundTrade-off between different
objectives
Levels of Strategy in an Levels of Strategy in an OrganizationOrganization
Any level of the organization can have objectives and devise strategies to achieve them
According to Hofer and Schendle there are three levels of strategies, ◦Corporate level strategy, ◦Business level strategy and ◦Functional level strategy.
Cont…Cont… Levels of Strategy in an Levels of Strategy in an OrganizationOrganization
Corporate Level Strategy◦According to Johnson and Scholes
corporate level strategy is concerned with what types of business the organization is in
◦Corporate strategy is formulated by top management to oversee the interests and operations of organizations that contain more than one line of business.
Cont… Corporate level Cont… Corporate level strategystrategyVarious aspects of corporate
strategyCharacteristics Comments
Scope of activities Strategy and strategic management impact upon the whole
organization: all parts of the business operation should support
and further the strategic plan
Environment The organization counters threats and exploits opportunities in the
environment
Resources Strategy involves choices about allocating or obtaining corporate
resource now and in future
Values The value systems of people with power in the organization
influence its strategy
Timescale Corporate strategy has a long-term impact
Complexity Corporate strategy involves uncertainty about the future,
integrating the operations of the organization and change
Business Level Business Level Strategy Strategy Business level strategy has an
organization approaches a particular product market area
Business strategy can involve decisions such as whether to segment the market and specialize in particular profitable areas, or to compete by offering a wider range of products
Functional Level Functional Level Strategy/Operational Strategy/Operational Strategies Strategies
Functional strategies concerned with how the components part of an organization deliver effectively the corporate and business level strategies in terms of resources, processes and people
Cont…Cont…Functional area Comment
marketing Diversifying products and services pricing, promoting and distributing
them, in order to satisfy customer needs at a profit. Marketing and
corporate strategies are interrelated
Production Factory location, manufacturing techniques, outsourcing and so on
Finance Ensuring that the firm has enough financial resources to fund its other
strategies by identifying sources of finance and using them effectively
HRM Secure personnel of the right skills in the right quantity at the right time,
and to ensure that they have the right skills and values to promote the
firm’s overall goals
Information
systems
A firm’s information systems are becoming increasingly important, as an
item of expenditure, as administrative support and as a tool for competitive
strength. Not all information technology applications are strategic, and the
strategic value of IT will vary from case to case
Summery
The Challenges for The Challenges for Strategic Management Strategic Management
Preventing strategic driftStrategic drift is where strategies
progressively fall to address the strategic position of the organization and performance deteriorates
The need of understand and address contemporary issues
The benefit of viewing strategy in more than one way(strataegy lenses)
Strategic Management Strategic Management PositionPositionThe environmentStrategic capabilityExpectations and purposes
Strategic choicesStrategic choicesBusiness level strategyCorporate level and international Developmental directions and
methods
Strategy into actionStrategy into actionOrganizing EnablingManaging change
Strategic DriftStrategic Drift
Environment Change
Strategic change
Contemporary issues Contemporary issues InternationalizationE-commerceChanging purposesKnowledge and learning
Strategy LensesStrategy LensesStrategy as designStrategy as experienceStrategy as ideas
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