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Objectives
This Lecture provides an overview of strategic management. It introduces a practical,
integrative model of the strategic-management process and defines basic activities and terms
in strategic management and discusses the importance of business ethics. After reading this
and evaluating cross-functional decisions that enable an organization to achieve its objective.”
Definition
“The on-going process of formulating, implementing and controlling broad plans
guide the organizational in achieving the strategic goods given its internal and external
environment”.
Interpretatio
n
1. On-going process:
organization.
First, it is an on-going process in which broad plans are firstly formulated than implementing
3. Strategic goals:
Strategic goals are those which are set by top management. The broad plans are made in
Internal and external environment generally set the goals. Simply external environment
forced internal environment to set the goals and guide them that how to achieve the goals?
A. Strategic Formulation:
Strategic formulation means a strategy formulate to execute the business activities.
Strategy formulation includes developing:-
Vision and Mission (The target of the business)
Strength and weakness (Strong points of business and also weaknesses)
Opportunities and threats (These are related with external environment for the
business)
Strategy formulation is also concerned with setting long term goals and objectives, generating
alternative strategies to achieve that long term goals and choosing particular strategy to pursue.
The considerations for the best strategy formulation should be as follows:
Allocation of resources
Business to enter or retain
Business to divest or liquidate
Joint ventures or mergers
Whether to expand or not
Moving into foreign markets
Trying to avoid take over
B. Strategy Implementation
Strategy implementation requires a firm to establish annual objectives, devise policies,
motivating employees and allocate resources so that formulated strategies can be executed.
Strategy implementation includes developing strategy supportive culture, creating an effective
organizational structure, redirecting marketing efforts, preparing budgets, developing and
utilizing information system and linking employee compensation to organizational
performance.
Strategy implementation is often called the action stage of strategic management.
Implementing means mobilizing employees and managers in order to put formulated strategies
into action. It is often considered to be most difficult stage of strategic management. It
requires personal discipline, commitment and sacrifice. Strategy formulated but not
implemented serve no useful purpose.
C. Strategy evaluation:
Strategy evaluation is the final stage in the strategic management process. Management
desperately needs to know when particular strategies are not working well; strategy evaluation
is the primary means for obtaining this information. All strategies are subject to future
modification because external and internal forces are constantly changing.
strategies to pursue. There must be a translation of strategic thought into strategic action. This
translation is much easier if managers and employees of the firm understand the business,
feel a part of the company, and through involvement in strategy-formulation activities have
affects an organization from top to bottom; it impacts all the functional and divisional
areas of a business. It is beyond the purpose and scope of this text to examine all the
Even the most technically perfect strategic plan will serve little purpose if it is not
implemented. Many organizations tend to spend an inordinate amount of time, money, and
effort on developing the strategic plan, treating the means and circumstances under which it
not through the plan. A technically imperfect plan that is implemented well will achieve more
than the perfect plan that never gets off the paper on which it is typed.
Prime task:
Peter Drucker says:
“The prime task is to think through the overall mission of a
business”.
Intuition and analytical judgment requires inputs from all managerial levels