Understanding Strategy in Business Management

Strategy

• Originates from the Greek word 'STRATEGOS', meaning generalship or the direction of military force deployment.
• Can be a plan, course of action, or decision rules that form a pattern.
• Involves activities moving an organization from its current state to a desired future state.
• It aims to achieve objectives through a game plan.
• The focus is on gaining customer trust, competitive advantage, and market position.
• Success involves planned intentions, and actions leading to the desired destination
• Creates a unified plan to achieve enterprise objectives, such as effectiveness, problem-solving, opportunity utilization, resource management, and threat coping.
• Requires formulation by top-level management, with sub-strategies potentially made by middle-level management
• It needs a long-range perspective and should be dynamic.
• Overcomes uncertain situations and makes optimal use of scarce resources.
• Helps an organization interact with its external environment to achieve goals.
• It involves allocating internal resources for the benefit of the entire organization.
• Strategizing supports maximizing strengths and confidently addresses environmental threats by integrating all areas of business.
• Solves novel problems and is future-oriented.
• Matches internal strengths with external opportunities and threats.

Levels of Strategy

• Corporate level
• Business unit level
• Functional or departmental level

Strategic Management

• Strategic Management involves decisions about a firm's future direction, encompassing its purpose, resources, and environmental interactions.
• All aspects of the people, finances, production, and customers form the overall strategy.
• It includes setting objectives, analyzing the internal organization and external environment, evaluating strategies, and strategy deployment.
• A dynamic process of formulation, implementation, evaluation, and strategic control to realize intent.
• According to Alfred Chandler (1962) focuses on determining long-term goals.
• The allocation of resources is necessary to achieve those goals.
• Pearce and Robinson (1988) say strategic management involves formulating and implementing plans to achieve company objectives.
• Fed R David (1997) defines it as formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives.
• Johnson and Scholes (2002) say it includes understanding strategic position, making strategic choices, and executing strategies.
• Dess, Lumpkin & Taylor (2005) view it as the analysis, decisions, and actions an organization takes to create and sustain competitive advantages.

Features of Strategic Management

• Has a long-term perspective, with decisions affecting the organization for three to five years.
• Involves key individuals in an intellectual process of perceiving, analyzing, and choosing between alternatives.
• It relates to the total system and can change organizational goals or managerial strategies throughout the business unit.
• Continuous and dynamic
• Future-oriented, encompassing forecasts and projections to select promising strategic options.
• Firms must adopt a proactive stance in turbulent environments.

Process of Strategic Management

• Strategic Intent: Establishes the foundation, clarifying what the organization stands for.

Strategic Intent

• Vision: States the organization's long-term aspirations.
• Mission: Relates the organization to society
• Definition: Describes the business in terms of customer needs, groups, and alternative technologies.
• Model: Clarifies how the organization makes revenue.
• Objectives: Define what the organization aims to achieve within a set time frame.

Strategy Formulation

• Environmental and organizational appraisal deal with identifying external opportunities, threats etc. This also identifies the strengths and weaknesses of the org
• Corporate level strategies relate to managing a business portfolio.
• Business strategies aims at gaining a company competitive advantage in its set portfolio.
• Requires alternative strategies and choosing the most appropriate course after evaluating opportunities, threats, and organizational strengths/weaknesses.

Strategy Implementation

• Strategy plan should be put into action
• Project implementation involves setting up the organization.
• Procedural implementation deals with the regulatory framework that Indian organizations operate within.
• Resource allocation involves procuring resources for implementation.
• The structural aspects of implementation involve appropriate organizational structure and systems to align with the strategy
• The behavioural aspect considers leadership styles, corporate culture, corporate politics, ethics, and social responsibility.
• The functional aspects relate to policy formulation in different areas.
• Operational implementation deals with the productivity, processes, people, and pace of implementation

Strategic Evaluation and Control

• Assesses strategy implementation and organizational performance.
• Feedback from evaluation should exercise strategic control, and strategies revised if necessary.

Limitations of Strategic Management

• A complex process
• Based on premises
• Heavily reliant on SWOT analysis.
• Overly ambitious, which leads to failure and frustration
• Requires effective resource allocation, structure, and evaluation/control, and has frequent implementation failure.
• Comprehensive and costly exercise for research.
• Requires skillful planning.

Role of Strategic Management in Business Organization

• Guides and drives the organization towards achieving its mission and vision.
• Facilitates the development of complex management as firms grow.
• Anticipates the future for effective decision-making.
• Enables opportunity identification.
• Enhances organizational reputation through consistent success towards organizational goals.
• Focuses on a proactive approach, securing every opportunity.
• Enables organizations to set goals for profit generation.
• Analyzes the external environment to leverage opportunities.
• This helps ensure success due to rationale, which reduces frustration due to planning

Vision

• It defines what the firm aims to become in the future.
• Kotter defines vision as "description of something in the future."
• Miller sees vision as broad, inclusive, and forward-thinking intentions.

Characteristics of Vision Statements

• Easily understood.
• Paints a picture of the company's desired future.
• Describes the company's journey and destination.
• Achievable in a reasonable time, feasible
• Focused enough to assist managers in making decisions.
• Appealing to long-term interests of its stakeholders.
• Flexible, allowing adaptation to changing events and circumstances.

Important Aspects of Vision

• More of a dream, aspiration
• Powerful motivator.
• Vision is a achievable position in far future.
• El Namaki vision is mental perception to create with horizon, condition for actualisation.

Vision Should Be

• Original charter of principles.
• A source for out plan and goals
• Not a pushing thing, pull instead
• Focus on unique self
• About independence

Vision Should Not Be

• High concepts slogans
• Strategy or plan from above
• History of grand past
• Passsionless

Benefits of Vision

• Inspiring and exhilarating.
• It represents integrity and is genuine.
• Helps thinking for long term
• Aids for taking actions
• It's original and unique
• Creates share purpose

The process of envisioning

• Consists of creating complex task
• Consists of ideology and future

Core ideology should

• Remains unchanged through time
• Core purpose of organization

Well concieved Vision

• Balanced concept of ideology and future

Envisioned future focuses on

• Long term goal of org
• A clear and detailed desc

Core value beliefs include

• Top management looking after employees
• The value of customer
• Orientation of wealth

Organization can

• Structure core with its philosopy
• It overall wants you to be it
• Addressed desires for org
• Broadens rationale with long time
• A link to own people

Approahces with Formulation

• Top level approach with CEO
• Using the people that matter
• Facilitation, everyone works together

Mission Statement

• Defines the organization's purpose
• Thompson’s define mission as organisation and existence
• Hunger and wheeler’s define the reason and purpose

Characteristics include

• Feasible
• Precise
• Clear
• Motivating
• Distinctive

Components include

• Customer?
• Products?
• Markets?
• Employees?

Concern for

• Is about public image
• Or basic belief

Difference

• Concept
• Answer
• Purpose
• Vision

Objectives

• It a specific task within time
• Easily to measure then goals

SMART

• Strategic
• Measurable
• Accepted
• Realistic
• Time Bound

Ideal Guide

• To participate, clary, flexibility, realy,

Ranking

• Consistent support Increase values Good balance

Types of Objectives

Overall

• Long ranges for a year
• Short ranges are for shorter

Departmental

• For different areas

Units

• Drawn from departments

Objectives with

• Managerial

It’s Important because

• Mindset of manager

Are of Objectives

• Productivity
• Financial
• Products?