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BUSINESS POLICY &
STRATEGIC MANAGEMENT
Chapter 1
Introduction to Business Policy &
Strategic Management
A Presentation by
Navaroon Sharma
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Why is the study of StrategicManagement as a separate
discipline necessary ??
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Learning Objectives
Highlight the historical development ofstrategic management and business policy inthe world and in India
Discuss the likely future developments in the
field of strategic management and businesspolicy
Explain the concept of strategy and its
limitations Describe the process of strategic decision
making
Describe the strategic management process
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Evolution of strategic management
and business policy The genesis of strategic management and
business policy
Evolution based on management practices
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
Vision and
Mission
Goals and
Objectives
Strategy:
Arenas
Vehicles
Differentiators
StagingEconomic logic
Implementation
Levers and
Strategic
Leadership
Internal and
External Strategic
Analysis
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Definition of Business Policy
Business policy, as defined by Christensen and others,is "the study of the function and responsibilities of
senior management, the crucial problems that affect
success in the total enterprise, and the decisions that
determine the direction of the organisation and shape itsfuture. The problems of policy in business, like those of
policy in public affairs, have to do with the choice of
purposes, the moulding of organisational identity and
character, the continuous definition of what needs to bedone, and the mobilisation 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 whichare derived from the policies, objectives and goals;
related to pursuing those activities which move an organisation from itscurrent 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 these activities.
the planned or actual coordination of the firm's major goals and actions, intime and space that continuously co-align the firm with its environment.
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Levels at which strategy operates
Corporate
Office
SBU
A
SBU
B
Finance Marketing Operations HRM Information
LEVELS OF MANAGEMENT LEVELS OF STRATEGY
CORPORATE CORPORATE-LEVEL
SBU BUSINESS-LEVEL
FUNCTIONAL
SBU
C
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Strategic decision-making
Objectives to be achieved are determined;
Alternative ways of achieving the
objectives are identified;
Each alternative is evaluated in terms of
its objective-achieving ability; 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 strategy formation
The prescriptive schools
The descriptive schools
The integrative school
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Definition of Strategic management
Strategic management is defined as the
dynamic process of formulation,implementation, evaluation and
control of strategies to realise the
organizations strategic intent.
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Four phases in strategic management
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
AppraisalAppraisal
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
ProceduralResource allocation
Structural
Behavioural
Functional &
Operational
Strategic
Control
Strategic
Evaluation
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Suggested Books
Strategic Management AC Hax & Majluf ,
PHI
Strategic Management & Business PolicyWilliam F Glueck Tata McGraw Hill
Strategic Management & Business Policy
Azhar Kazmi Tata McGraw Hill
Recommended