MMS 3rd Sem Strategic Management

8/8/2019 MMS 3rd Sem Strategic Management

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3.0.2 STRATEGIC MANAGEMENT

Presented by:

Quazi Md. Kamran


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Introduction

Phases of Strategic Management Process

Strategic Intent

Vision

Mission

Goal and Objectives

Philosophy

Policies of an organization


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Definition:

Strategic Management can be defined as the dynamic process of

formulation, implementation, evaluation and control of

strategies to realize the organization's strategic intent.

In simple words:

It is a set of managerial decisions and actions that determine the

long term performance of a company.


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Strategic management is dynamic process. It is not a one time,

static or mechanistic process.

Earlier referred to as business policy, strategic management

deals with long range planning and strategy.

In 1911 Harvard Business school introduced a course in

management.


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Establishing the hierarchy of strategic intent:

Creatingandcommunicatingavision

Designingamission Statement

DefiningthebusinessAdoptingthebusinessmodel

Settingobjectives

Formulation of Strategies:

Performingenvironmentalappraisal

Doingorganizationalappraisal

Formulatingcorporate-levelstrategies

Formulatingbusiness-levelstrategies

Undertakingstrategicanalysis


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Exercisingstrategicchoice

Preparingstrategicplan

Implementation of strategies:

Activatingstrategies:Designingthestructure,systemsandprocesses

Managingbehavioralimplementation

Managingfunctionalimplementation

Operationalizingstrategies

Performing strategic evaluation and control:

Performingstrategicevaluation

Exercisingstrategiccontrol

Reformingstrategies


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Itreferstothepurposetheorganizationstrivesfor.

Strategic Intent may be ex pressed in terms of a vision or

mission statement for the organization as a corporate whole.

According to Hamel and Prahalad strategic intent is an

obsession with an organization, an obsession of having

ambition that may even be out of proportion to their resources

and capabilities.


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Definition:

Kotler definesitasadescriptionofsomething(anorganization,

acorporateculture,abusiness,atechnology,anactivity)inthe

future.

Thebenefitsofhavingavision:

Parikhand Neubauer (1993)pointsoutseveralbenefits

Goodvisionsareinspiringandexciting.

Goodvisionshelpinthecreationofacommonidentityandasharedsenseof

purpose .


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Cont..

Goodvisionsarecompetitive,originalandunique.

Goodvisionsfosterrisktakingandexperimentation.

Good Visionsfosterlongtermthinking.

Goodvisionsrepresentintegrity.


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Whata Visionshouldandshouldntbe

AVision should be:

AnOrganizationcharterofcorevaluesandprinciples.

Theultimatesourceofourpriorities,plansandgoals.

Apullerintothefuture.

A determinationandpublicationofwhatmakesusunique.

AVision shouldnt be:

A strategyorplanandaviewfromthetop.


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Cont

A highconceptstatement,mottoorliteratureoranadvertisingslogan.

A historyofourproudpast.

Passionless.


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Vision 2007 (Tata Steel)

Toseizetheopportunitiesoftomorrowandcreateafuturethatwill

makeitaneconomicvalueaddedpositivecompany.

Tocontinuetoimprovethequalityoflifeofouremployeesandthe

communitiesweserve.

Revitalizethecorebusinessforsustainablefuture.

Ventureintonewbusinessesthatwillownashareofourfuture.


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Missioniswhatanorganizationisandwhyitexists.

Organizationsrelatetheirexistencetosatisfyingaparticular

need ofthesociety.

Missionisastatementwhichdefinestherolethatorganization

playsinthesociety. Itreferstotheparticularneedsofthe

society. Forex theinformationneeds.


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A missionstatementshouldpossessthefollowingseven

characteristics:

It should be feasible:

A mission should always aim high but it should not be an

impossible statement. It should be realistic and achievable.

It should be precise:

A mission statement should be precise not be so narrow as to

restrict the organizations activities, nor should be broad to make it

meaningless.


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Cont..

It should be clear:

Itshouldbeclearenoughtoleadtoanaction.

It should be motivating:

A mission should be motivating for members of the organization

and of the society and they should feel it worthwhile working for

such an organization or being its customers. Pursuing best global

practices for delivering added value to customers in order to


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Cont..

achieveitsvisionofbecomingatechnology-enabledcustomer-

centricfinancialservicesorganization(BankofBarodas Vision

2010).

It should be distinctive:

A mission statement should be indiscriminate is likely to have little

impact .For ex-If all the scoter manufacturers defined their mission

statement in a similar fashion, their would not be much of a


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Cont..

difference among them. But if one defines it as

providing scoters that would value for money for years,

it creates an important distinction in the public mind.

It should indicate the major components of strategy:

A missionstatement,alongwiththeorganizationalpurposeshould

indicatethemajorcomponentsofthestrategytobeadopted. The


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Cont..

mission of HCL Info systems is: To provide world class

information technology solutions and services to enable our

customers to serve their customers better. It provides a clear

indication of the emphasis in the strategies of the company on

providing cutting edge technology and customer-orientation.

It should indicate how objective are to be accomplished:

A missionstatementshouldalsoprovidecluesregardingthe


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Goals denote what an organization hopes to achieve over a

period of time.

They represent the future state or outcome of efforts put in now.

A broad category of financial and non financial issues are

addressed by the goals that a firms sets.


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Official goals:

Serve the purpose of public relations value and help in

legitimizing the organization in the business

environment.

Operative goals:

Provide an indication of what an organization is really


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attempting to do. Generally, these can be inferred from the actual

operating policy. They can help focus attention ,reduce uncertainty

and provide a choice of organizational design alternatives to choose

from.

Operational goals:Refers to those used by supervisory personnel to supervise the

performance of subordinates and thereby influence their behavior.


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Objectives are the ends that state specially how the goals shall

be achieved.

They are concrete and specific in nature in contrast to goals that

are generalized.

Characteristics of objectives:

It should be understandable.

It should be concrete and specific.


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Cont

It should be related to a time frame.

It should be measurable and controllable.

It should challenging.

Different objective should correlate with each other.

It should be set within constraint.


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The organization's core philosophy is a basic for constructing

and operating organization which come from the deepest

thought about function required by the management to come to

its vision. The designed vision and mission(s) will motivate and

drive and become a basic of core philosophy formulation.


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A companyphilosophyevolvesasasetoflawsorguidelines

thatgraduallybecomeestablished,throughtrialanderroror

throughleadership,asexpectedpatternsofbehavior.

Herearefivecommonphilosophywhichmostsuccessful

corporationsfollows:

Maintenanceofhighethicalstandardsinexternalandinternal

relationshipsisessentialtomaximumsuccess.

Decisionsshouldbebasedonfacts,objectivelyconsidered-- what I

callthefact-founded,thought-throughapproachtodecisionmaking.


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Cont

The business should be kept in adjustment with the forces at work in its

environment.

People should be judged on the basis of their performance, not on

personality, education, or personal traits and skills.

The business should be administered with a sense of competitive

urgency.


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Policies can be considered as a guide to action.

According to Steiner, Miner and Gray, they are guides to action

or channels for thinking.

Policy provides a definition of the common purpose for the

organizational components as a whole .It is desirable that

persons responsible for implementation of policy use discretion

and judgment in appraising and decision making among

alternative course of action.


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Some examples of policies of global organization are now

given.

GE: General Electric must be the No.1 or No.2 company

whenever it competes(supports the objective of the company to

be theNo.1 in market capitalization).

INTEL: Cannibalize your product line with better products

before a competitor does it to you(supports Intels objective of


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market leadership).

3M:Researchers should spend 15% of their time on something

other their primary projects(supports the companys strong

product development strategy)


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The word strategy derived from the Greek word which hasbeen derived from two words: -"stratos" meaning army.

"ago" which is the ancient Greek for

leading/guiding/moving.

Strategy is the mean or the tool by which objectives areconsciously and systematically pursued and obtained over

time.


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Strate deals wit competiti esit ation in an uncontrolled

environment.

Planning deals wit situationsin a controlled environment.

Strategy is howeveran rt, notaScience,itisthe rt ofthe

conscious mind in action when facing a challenge. Strategy isthe rt

that man invented threethousand yearsago, when the "voices ofthe

ods" stopped guiding him in the decision ma ing process!

Itisthe greatest "winning tool" that man everinvented!


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When the resources are finite.

When there is uncertainty about competitive strengths and behavior.

When commitment of resources is irreversible.

When decisions must be coordinated about control of the flung places and

over time.

When there is uncertainty about control of the initiative.


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StrategyisthekeysuccessinachangingbusinessenvironmentStrategyprovidesaunifiedsenseofdirectiontowhichallmanagers

oftheorganizationcanrelate.

Withoutastrategyanorganizationislikeashipwithoutarudder

goingaroundincircles.

Without a strategy decisions becomes increasingly unreliable.


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Operational Planning

Process


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Define:

Clearly define your capacity gaps (current and potential sources of

resources and partners to help fill capacity needs) and most critical

resource requirements i.e. human resource, financial and other

resources, analyzing risks, projects lifespan. Capacity assessmentmethodology developed by the McKinsey consulting firm (called the

7-S tool)


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Design:

Inthisphasestrategies,activitiesandmonitoringplansaredesigned.

For-workplansandbudgeting

Implement:

Inthisphaseyouimplementthoseplans.Analyze/adapt:This phase includes closely monitoring the results and modify the

plans if it is not working well or when there are changes in the

environment.


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Share:

In this phase you share the outcome with your seniors, peers and

subordinate.


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Advantage:

The major advantage of Strategic planning is that it

provides you the summary of organizations

developmental process as well as give you an systematic

presentation of organization core directions.

Strategic planning helps you to pull back the lens, get a

big purchase view and consider future scenarios. It gives


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you the best opportunity to maintain, control, avoidserious pitfalls and capture opportunities.

Another advantage is that strategic planning is not just

for big companies and has benefits no matter what your

scale or goals.


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Advantage:

Operational planning focuses tightly on the day to day

operations with no more than a 12 month cycle.

Operational planning focuses on adjusting and

developing controls, increasing efficiencies and reducing

time and costs.


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Advantage:

Operational planning will determine where to focus

attention and where you can take a step back. In addition

to informing human resource decisions (such as hiring

additional help), operational planning can identify areas

where you should look at outside professional assistance.


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Advantage:

Operational plans answer key questions such as Who is

doing what?, What are the day to day activities?

Documents

MMS 3rd Sem Strategic Management