Strategic Management and

Business Policy

Lecture 01
(Refer Ch. 2 of Business Policy and
Strategic Management, Gupta et al)
Introduction and Strategic Intent

IFM SM
2014

Introduction and Strategic Intent

Learning Objectives of the Session
Introduction to subject, course outline,
pedagogy
Understand hierarchy of strategic Intent
Appreciate how vision, mission, core
values, and goals are drawn
Understand way a firms strategic Intent is
determined
Learn how to describe and communicate an
organizations strategic intent in the form of a
strategy diamond
Understand concept of strategic
dissonance and its implication on a firm.

Course outline & Pedagogy

Microsoft Office
Word Document

Economic Environment
VUCA
Disruptive Technologies
Rampant Corruption
Social Media

Unstable neighbors

Environment Concerns

Balance of payment

Banking NPAs

Crisis

WEI JI
Danger

Opportunity

VUCA World
Get there early by Bob Johansen
Volatile
Uncertain
Complex
Ambiguous

William Gibson famously said, The future is

already here, its just not evenly
distributed.
CEO (Clairvoyant, Evangelist, Oracle)
Institute for the future www.iftf.org

Gartner Hype Cycle

Michael Porters Introduction (1980)

Every firm competing in an industry has a
competitive strategy, whether explicit or implicit.
This strategy may have been developed explicitly
through a planning process or it may have
evolved implicitly through the activities of the
various functional departments of the firm. Left to
its own devices, each functional department will
inevitably pursue approaches dictated by its
professional orientation and the incentives of
those in charge. However, the sum of these
departmental approaches rarely equals the best
strategy

Business Policy
Older name for Strategic Management
Documents High level decisions like the Indian
constitution
A set of management decisions oriented towards
enhancing and sustaining the firms competitive
advantage based on a system of extrinsic and
intrinsic values.
Extrinsic Value: Added values delivered to the
network of its stakeholders
Intrinsic Values: Core values such as ethics, and
credibility that the firm have to survive and
succeed.
Stakeholders: Are workforce, investors,

Strategic Intent- Introduction

Effective strategic management begins with the
organisation clearly articulating its vision for the
future.
Gary Hamel and C.K.Prahalad ( 1989) : strategic
intent refers to the purpose of the organisation
and the ends it wishes to pursue.
The purpose or ends the organisation wishes to
pursue vary from being really broad and longterm ( vision and mission) , to being narrow , with
a focus on the short or near-term ( objectives or
goals).

Strategic Intent- Hierarchy of strategic

Intent
Fig 2.1 page 40 ( Miller 1998)
Few

Integrative

Vision
Mission
Core Values
Goals
Objectives
Specific

Plans

More

Strategic Intent- Hierarchy of strategic

Intent-Vision
Vision: A Dream, aspirations it holds for the
future ,broad category of long-term intentions
that the organisation wishes to pursue
( where do we want to go)
and should answer ,
What changes are occurring in markets and
what are the implications for the direction we
need to move
What new or different customer needs should
we move and satisfy.

Strategic Intent- Hierarchy of strategic

Intent-Vision
What new or different buyer segments
should we concentrate on.
What new geographic or products
markets should we be pursuing
What should the Companys make up
look in five years.
What kind of the Company should we
be trying to become.

Strategic Intent- Hierarchy of strategic

Intent-Vision
Should Specify the category of intentions that
are,

Broad, all inclusive, forward thinking

Aspirations for the future- ends rather the means
Mental image of the future state
A dream that is shared across the whole
organisation and its stakeholders.
Inspiring, motivating and challenging
A slogan it could be encapsulated in an
actionable slogan
Easily communicated

Strategic Intent- Hierarchy of strategic

Intent-Vision
NTPC, India, To be one of the worlds largest and best power
utilities, powering Indias growth.
NASA, To improve life here; To extend life to there; To find life
beyond.
Infosys,India ,To be a globally respected corporation that
provides best-of-breed business solutions, leveraging
technology, delivered by best-in-class people."
AirTel,India, To make mobile communications a way of life and
be the customers first choice.
ITM: To be amongst the best business schools in India by
producing business leaders rather than just management
graduates, and ensure that our students experience a novel
learning curve that prepares them to cope with the day-to-day
pressure of the real world.

Strategic Intent- Hierarchy of strategic

Intent-Mission

Mission is a statement that

specifies the purpose ( why do
we exist), identity and the basic
values of organisation. An ideal
mission statement has,
What customer needs is being satisfied
Who is being satisfied
How value is created and delivered to
customers satisfying their needs.

Strategic Intent- Hierarchy of strategic

Intent-Mission
Obligations the firm holds to its
stakeholders
The scope of the business
Sources of competitive advantage
The Organisations view of the future.

Strategic Intent- Hierarchy of strategic

Intent-Mission
Infosys, India

To achieve our objectives in an

environment of fairness, honesty, and
courtesy towards our clients, employees,
vendors and society
Airtel, India

We will meet the mobile communication

needs of our customers through (a) error
free service delivery (b) Innovative
products and services Cost efficiency
and (d) Unified messaging solutions.

Strategic Intent- Hierarchy of strategic

Intent-Mission
ITM: To provide industry relevant,
competitive, Professional and
Management education, training and
consultancy in various disciplines of
management and add value, interalia to provide educational
opportunities to mould them into
contributing citizens of the world

Strategic Intent- Hierarchy of strategic

Intent-Core Values
Core values : commonly held beliefs, mindsets
and assumptions that shape how work is done
in an organisation.
Specify organisations and its members
enduring preference for a mode of conduct ( in
both their business processes, and their
relationship with business partners.
Derived out of mission statement and aid in
differentiating organisation from others , apart
from spelling out the expectations and
intended behaviour of people.
3F (Focus, Fast, Fun) of APTECH

Strategic Intent- Hierarchy of strategic

Intent-Core Values
E.g. Aventis India a Pharmaceutical Co.
Creativity
Restless with the status quo, think out of box,
seek out and adapt best practices, extend to
all areas of work.
Empowerment
Achieve through powerful missions and
transparent processes, encourage and reward
self confidence and initiative, require
accountability
Courage
Invite open and challenging discussion upfront, face reality, make timely difficult
decisions and follow-through on them, set
demanding targets and standards for ourselves
and others.

Strategic Intent- Hierarchy of strategic

Intent-Core Values
E.g. Aventis India a Pharmaceutical Co.

Respect for people

Demonstrate respect by developing our people and
helping them set and achieve high performance
standards, reward performance, respect diversity. treat
all people with dignity.
Integrity
Walk the talk, Honesty, resist politics
Sense of urgency
Strive for speed and simplicity in every thing we do,
fight bureaucracy, focus on delivery.
Networking
Reach out beyond boundaries to share information and
ideas, promote collaboration and break down silos,
positive networking required courage, discipline and
integrity and refuses to engage in political workarounds
at the cost of transparency

Strategic Intent- Hierarchy of strategic

Intent-Goals
Goals are route/actions the
organisation takes to achieve its
vision and mission, in the form of
specific milestones.
Goals are both financial and nonfinancial
Goals also specify the relative
priorities and trade-offs between the
various goals the organisation
intends to pursue.

Strategic Intent- Hierarchy of strategic

Intent-Goals
Council for Scientific and Industrial
Research ( CSIR), India Set following
goals for 2001,
Move towards the path of selffinancing by generating over Rs. 7
Billion from external sources, as
against Rs 1.35 Billion in 1994-95, of
which at least 50% will be from
industrial customers ( up from 15% in
19994-95); develop ten exclusive
and globally competitive

Strategic Intent- Hierarchy of strategic

Intent-Goals
Hold a patent bank of 500 foreign
patents ( up from 50);
Realise 10% of operational
expenditure from intellectual
property licensing ( up from <1%)
Derive annual earnings of $40 million
from oversea R & D work and
services ( up from <2 million)

Strategic Intent- Hierarchy of strategic

Intent-Objectives
Objectives are the operational definitions of
organisations goals
Provide the measurable parameters for
monitoring/evaluating the performance of the
organisation.
Objectives also include a time dimensions to the
specific goals the organisation intends to achieve
in defined periods.
By providing a series of time-bound objectives,
the organisation demonstrates how it can move
towards achievement of its goals, through
consistently and periodically achieving its
objectives

Strategic Intent- Hierarchy of strategic

Intent-Objectives
Few Objectives of Indian Oil
Corporation: A Global future 500
Company,
Strategic Objectives:
To serve the national interest in oil and
related sectors in accordance with
Government policies.
To enhance the countrys self-sufficiency
in oil refining and build expertise in
laying crude petroleum product pipeline.
To earn reasonable rate of return on
investment..

Strategic Intent- Hierarchy of strategic

Intent-Objectives
Financial Objectives :
To ensure maximum economy in
expenditure
To complete all planned projects within
the scheduled time and approved cost.
To reduce the cost of production of
petroleum products by means of
systematic cost control measures and
thereby sustain market leadership
through cost competiveness.
To develop long-term corporate plans to
provide for adequate growth of

Strategic Intent- Hierarchy of strategic

Intent-Plans
Plans are specific actions that will be taken by an
organisation to achieve its objectives.
Plans specify the roles members of the
organisation will perform, the resource allocation
across different organisational sub-units and
departments , and prioritize and schedule the
various activities.

Strategic Intent- Hierarchy of strategic

Intent-Plans

A 24X7 Institution imparting high quality and industry

relevant management education based on Indian culture
and ethos with discipline, hard work and integrity on core
values.
Continuous interaction with industry professionals through
Guest lectures, Seminars, Workshops and Guest dinner
lectures to prepare the students for the high and exacting
standards of corporate career.
Training a new breed of managers who are sensitive and
caring to the environment and peoples problem-highly
committed and motivated.
To expose the students to young and successful diaspora to
build up self confidence and a feeling of I TOO CAN DO IT
High speed brand board connectivity in a Wi-Fi enabled
work environment with 24 hour access.
Exposing the students to internationally known
management experts b organizing special seminars and
workshops

Strategic Intent- Hierarchy of strategic

Intent-Determine Firms Strategic
Intent
The strategic intent of the
organisation is determined by a
continuous interplay of various forces
assessment of the strategic options the
organisation has in front of it,
interests of various stakeholders
associated
the industry context of firm operates in,
its leadership , history and culture,
Future as perceived by organisations
dominant coalition.

Strategic Intent- Hierarchy of strategic

Intent-Determination of a Firms
Strategic Indent
The process of determining the
strategic intent of the firm should be
by answering following set of
questions:
What Business are we in? What do we
want to be known for/as in future? In
what way will the organisation serve the
interests of the various stakeholders?
How does the organisation define its
various scopes of businesses? How
broad, aggressive and powerful will
organisations intent be defined.

Strategic Intent-Communication
Having determined a firms strategic intent
,strategy of the firm is conveyed in the right
manner to all the constituents/stakeholders in
entirety.
Hambrick and Fredrickson ( 2001) : Specifies the
Architecture of communication strategy in
the form of a Strategy Diamond
Fig 2.2 page 49

Strategy Diamond
Arenas
Product, Market, Geographies,
technologies

Staging
Phase wise
growth plans i.e.
first eyeballs/
volumes then
profits

Economic
Logic
(Business
Model e.g.
advertisement
based etc.)

Differentiators
Image, customization, price,
quality

Vehicles
JV, Franchise,
distributors etc.

Strategic Intent-Communication
Strategy Diamond, Definitions
Arenas: Imply a specification of what businesses
the firm wishes to be active in and with how
much emphasis

Which
Which
Which
Which
Which

Product Categories?
Market segments?
Geographic segments?
Core technologies?
Value-creation stage?

Staging : Indicate speed of expansion and

sequence of ( initiatives) major activities of a
firm in pursuit of its intent.

Strategic Intent-Communication
Strategy Diamond, Definitions
Vehicles : How to get there and are
means firm uses to reach its ends.

Internal Development?
Joint Ventures?
Licensing/Joint Ventures?
Acquisitions?

Economic Logic: Is the business model to

generate its revenues and profits.
Lowest cost through scale advantages and
scope and replication advantages?
Premium prices due to unmatchable service
and proprietary features?

Strategic Intent-Communication
Strategy Diamond, Definitions
Differentiators: specific sources of competitive
advantage and how will we win?

Image?
Customisation?
Price?
Styling?
Product Reliability?

Strategic Intent- Strategic

dissonance

Operation in highly dynamic environments,

firms finds that its strategies are separated
from Intent and there is divergence in terms
of,
The basis of competition in the industry,
The distinctive competence of the firm
The Companys official corporate strategy ( its
intent and strategy statement)
The companys strategic actions and
The companys internal selection environment
for new strategies, including resource
allocation rule and organisation culture.

Burgelman and Grove (1996) defined these

situations as strategic dissonance.

Strategic Intent- Strategic

dissonance
Organisations has to
redefine/reconsider their strategic
intent and strategies so that they are
in alignment with each other.
The employees are forced to change
mind set, acquire new skills and
competencies, reorientation of
processes, culture of knowledge
sharing.

Strategic Intent- Summary

Strategic Management begins with the
organisation clearly articulating its vision for the
future.
Defines Strategic intent in the form of vision,
mission, core values goals, objectives and plans.
Strategic intent is determined by a continuous
interplay of various forces
Along with strategic intent it is also imperative
that the firm specifies its strategic architecture
( strategy diamond) in the form of arenas,
differentiators, vehicles, staging and economic
logic. This is required for communication at
various level in an organisation.