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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