3.0.

2 STRATEGIC MANAGEMENT

Presented by:
Quazi Md. Kamran
Introduction
Phases of Strategic Management Process
Strategic Intent
Vision
Mission
Goal and Objectives
Philosophy
Policies of an organization
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.
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.
Establishing the hierarchy of strategic intent:
Creating and communicating a vision
Designing a mission Statement
Defining the business
Adopting the business model
Setting objectives
Formulation of Strategies:
Performing environmental appraisal
Doing organizational appraisal
Formulating corporate-level strategies
Formulating business-level strategies
Undertaking strategic analysis
 Exercising strategic choice
Preparing strategic plan
Implementation of strategies:
Activating strategies:
Designing the structure, systems and processes
Managing behavioral implementation
Managing functional implementation
Operationalizing strategies
Performing strategic evaluation and control:
Performing strategic evaluation
Exercising strategic control
Reforming strategies
It refers to the purpose the organization strives for.
Strategic Intent may be expressed 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.
Definition:
Kotler defines it “as a description of something(an
organization, a corporate culture, a business, a technology, an
activity) in the future.
The benefits of having a vision:
Parikh and Neubauer (1993) points out several benefits
Good visions are inspiring and exciting.

Good visions help in the creation of a common identity and a shared sense of
purpose .
Cont..

Good visions are competitive, original and unique.

Good visions foster risk taking and experimentation.

Good Visions foster long term thinking.

Good visions represent integrity.

An Organization charter of core values and principles.

The ultimate source of our priorities, plans and goals.

A puller into the future.

A determination and publication of what makes us unique.

A Vision shouldn’t be:

A strategy or plan and a view from the top.

A high concept statement, motto or literature or an advertising slogan.

A history of our proud past.

Passionless.
Vision 2007 (Tata Steel)
To seize the opportunities of tomorrow and create a future that will

make it an economic value added positive company.

communities we serve.
Revitalize the core business for sustainable future.

Venture into new businesses that will own a share of our future.
Mission is what an organization is and why it exists.
Organizations relate their existence to satisfying a particular
need of the society.
Mission is a statement which defines the role that
organization plays in the society. It refers to the particular needs
of the society. For ex the information needs.
A mission statement should possess the following seven
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 organization’s activities, nor should be broad to make it
meaningless.
Cont..
It should be clear:
It should be clear enough to lead to an action.
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
Cont..
achieve its vision of becoming a technology-enabled customer-
centric financial services organization(Bank of Baroda’s 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
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 mission statement ,along with the organizational purpose should
indicate the major components of the strategy to be adopted. The
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 mission statement should also provide clues regarding the
Cont..
manner in which the objective are to accomplished. For ex-LG
Electronics has its mission of becoming ‘2 by 10’,that is double the
sales volume and profit by year 2010’ through setting its mid term
and long term goal to rank among the top three electronics,
information and telecommunication firms in the world by 2010.
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.
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
 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.
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.
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.
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.
A company philosophy evolves as a set of laws or guidelines
that gradually become established, through trial and error or
through leadership, as expected patterns of behavior.

Here are five common philosophy which most successful

relationships is essential to maximum success.

call the fact-founded, thought-through approach to decision making.

its environment.
People should be judged on the basis of their performance, not on

personality, education, or personal traits and skills.

urgency.
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.
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 the No.1 in market capitalization).
INTEL: Cannibalize your product line with better products
before a competitor does it to you(supports Intel’s objective of
market leadership).
3M:Researchers should spend 15% of their time on
something other their primary projects(supports the company’s
strong product development strategy)
The word “strategy” derived from the Greek word which has
been 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 are
consciously and systematically pursued and obtained over
time.
Strategy deals with competitive situation in an uncontrolled
environment.
Planning deals with situations in a controlled environment.
Strategy is however an Art, not a Science, it is the Art of the
conscious mind in action when facing a challenge. Strategy is the Art
that man invented three thousand years ago, when the "voices of the
Gods" stopped guiding him in the decision making process!
It is the greatest "winning tool" that man ever invented!
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.
Strategy is the key success in a changing business environment
Strategy provides a unified sense of direction to which all managers
of the organization can relate.
Without a strategy an organization is like a ship without a rudder
going around in circles.
Without a strategy decisions becomes increasingly unreliable.
Operational Planning
Process
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, project’s lifespan. Capacity assessment
methodology developed by the McKinsey consulting firm (called the
7-S tool)
Design:
In this phase strategies, activities and monitoring plans are designed.
For-work plans and budgeting

Implement:
In this phase you implement those plans.
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.
Share:
In this phase you share the outcome with your seniors, peers and
subordinate.
Advantage:
The major advantage of Strategic planning is that it
provides you the summary of organization’s
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
you the best opportunity to maintain, control, avoid
serious 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.
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.
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.
Advantage:
Operational plans answer key questions such as “Who is
doing what?”, “What are the day to day activities?”