Strategic Mgt Intro

What is an Organisation?

Why does and organization exist? •Because consumers exist •Value creation for society •Growth and Evolution

What are the important activities done by an organization? • • • • • •

Planning Organizing Coordinating Directing Staffing Control Activities are LONG term & SHORT term

MOST IMPORTANT • Which is needed by all functions …. • Which is needed at all times….. • Which is needed at all levels…. DECISION MAKING

There are several techniques and tools for Decision Making STRATEGIC MANAGEMENT IS ONE OF THE MOST IMPORTANT TOOLS for MANGERIAL DECISION MAKING IN LONG RUN !

Boundaries of Strategic Mgt • Managerial Decisions – Operational Decisions – Organizational Decisions – Strategic Decisions

Operational Decisions (operational effectiveness) • Absorb bulk of managerial time and attention • Are self generative • Concerned with optimal use of resources allocated

Organization Decisions • Orgn. Structure to create maximum performance potential (authority, reporting, control, information etc.) • Arise with periodicity • Shaped by scope of activities • Shaped by corporate objectives and policies “Structure Follows Strategy” – Alfred Chandler

Strategic Decisions • Simultaneously concerned with external and internal environment • Judicious allocation and reallocation of resources • Long term growth and survival • Not self generative (one decision may not be repetitive)

Strategic Management • Has major resource implications • Likely to affect long term direction of an organization • Likely to affect operational and organizational decisions • Affected and shaped by values and expectations of managers and other stakeholders • Some examples:– – – –

What are the long term goals and objectives? Which product markets to enter? Whether to diversify or to merge? How to cope with environmental changes?

Hierarchy of Strategy

Strategic Management Defined Strategic management is the art and science of formulating, implementing, and evaluating cross functional decisions that enable an organization to achieve its objectives. “It is not a single act but a set of activities”.

Strategic Management Process Stages Strategy Formulation Strategy Implementation

Strategy Evaluation

Activities Conduct Research Establish annual Objectives Review internal and external factors

Integrate intuition with analysis Device Policies

Measure Performance

Make Decision

Allocate Resources

Take Corrective Action

Basis for good Strategic Decision Intuition + Analysis

Effective Strategic Decision

Long Range Planning Business Policy Strategic Management