Strategic management

STRATEGIC MANAGEMENT

INTRODUCTION

• “Strategy” refers to the plans and actions that aim to fulfill organisational purpose. It ensures the achievement of basic organisational objectives through proper execution.

• Stategy management deals with the process of decision making and resulting actions, that determines whether an enterprise survives, excels, grows or dies. It is concerned with the making and implementing decisions about organisations future direction.

MEANING

• The word “strategy” is derived from the Greek term “Statego” which means “General”.

• Strategy may be defined as unified, comprehensive and integrated action plan designed to achieve specific objectives in the event of difficulty.

• Strategy may be considered as an action plan, initiative or response of an organisation for seeking achievement of the objectives in a changed specific situation.

DEFINITIONS

1) “Strategy is the complex plan for bringing the organisation from a given posture to a desired position in a future period of time.”

- D.I. Cleland and W.R. King2) “Strategy is a plan or course of action, which is of

vital, pervasive, or continuing importance to the organization as a whole.”

-Arthur Sharplin

TYPES OF STRATEGY

INTENDED STRATEGY• Refers to plans or future efforts of the managers.• It presumes a planned, deliberate, systematic and thoughtful

approach towards strategy.• It spells out not only the ends that are to be pursued but also

the desired means to be used.

DELIBERATE STRATEGY

• It is that part of the intended strategy that is actually implemented.

REALIZED STRATEGY

• It refers to the past• It speaks of the implemented part of intended strategy or the

actions that have actually materialized over a period of time.

UNREALISED STRATEGY

• It refers to that part of intended strategy which does not see the light of the day due to changing environment, managerial incompetence, political infighting etc.

EMERGENT STRATEGY• It refers to the evolving strategy in light of the environmental

realities.• It may or may not be formally developed.

IMPOSED STRATEGY• It refers to strategy imposed upon by the powerful stake

holders in the organization, for e.g. the government by its budgets, monetary policy, trade policy etc.

MASTER STRATEGY• It is in the nature of overall plan that helps the management’s

to formulate and implement general policies of the business effectively.

PURE STRATEGY

• Pure strategy involves the utilization of resources in one area of operation at a time.

MIXED STRATEGY

• It involves a number of strategies simultaneously.• It combines pure strtegies in a variety of ways depending upon

a given situation.

LEVELS OF DECISION-STRATEGY

CORPORATE LEVEL

BUSINESS UNIT LEVEL

FUNCTIONAL LEVEL

CLASSES OF DECISIONTactical Strategic

Major• e.g. If it

relates to the purchase of a site for a factory it is major decision

Minor

• e.g. Purchase of a stationary is a minor matter

Programmed

Concerned with relatively routine problems

They are structured and repetative

Risks involving is not high

Such decisions are taken by the board of directors or committee

experts

Such decisions are made by manager as an individual and not

as a member

Organisational or group decision

Personal or individual decision

Policy decisions are taken by top management

Operating decisions are taken by lower level management

Policy or Intitutional decision

Operating decision

LIST OF DOMESTIC COMPANIES WHICH ADOPTED STRATEGIC MANAGEMENT TO ACHIEVE THEIR CORPORATE GOALS

• “Videocon international” the domestic electronic major adopts strategic management techniques to produce most advanced, internationally competitive consumer electronics and home appliances for Indian consumers at an affordable price, to become a market leader in this segment.

• The denim giant, “Arvind mills” adopts strategic management to achieve global dominance in selected business, through continuous product and technological innovation, customer orientation and a focus on cost effectiveness.

• The domestic auto giant “Mahindra and Mahindra” gives importance to strategic management techniques in its corporate planning to become a full line player in the auto business with industry leadership and to become a leading global tractor manufacturer