UNIT I.pptx
- 2. • The strategic management process means defining the organization’s strategy. • It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. • Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises it’s competitors; and fixes goals to meet all the present and future competitor’s and then reassesses each strategy.
- 3. Strategic management process has following four steps: • Environmental Scanning- Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it. • Strategy Formulation- Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.
- 4. • Strategy Implementation- Strategy implementation implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources. • Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as it’s implementation meets the organizational objectives.
- 6. MEANING OF STRATEGY • The word "Strategy" is derived from the Greek word "Strategia", which means Generalship. • The term strategy entered the business world from military services where it was originally used. • Strategy tries to achieve synergy and balance between objective, resources and concept to maximize the possibility of success and fruitful results. • The purpose of formulating strategy is to bring consistency and alignment in the activities of an organisation, which can be accomplished by various methods and resources.
- 7. • Strategy refers to determining the fundamental long-term organisational goals and at the same time developing plans, acquiring, allocating and deploying resources in order to achieve those goals.
- 8. • Strategy helps an organisation to minimize the strength of competitors by maximizing its own strengths. • Strategy work as a blueprint of an organisation that define its vision, mission and also helps in determining the future course of action. • Strategy is formulated to achieve current goals of enterprise by optimum allocation and utilization of internal resources and by collaborating different organisational pursuits.
- 9. • According to William F. Glueck : • "Strategy is a unified, comprehensive and integrated plan designed to ensure that the basic objectives of the enterprise are achieved". • According to Alfred D. Chandler : • "Strategy is the determination of the basic long term purpose and objective of an enterprise and the adopting of course of action and allocation of resources necessary for carrying out these goals".
- 10. Importance of Strategy • Following are the importance of strategy explain in details : • 1. Ensures Proper Allocation of Resources - While formulating a strategy the strategist have to keep in mind information that they have access to and appraise all possible outcomes before selecting a particular alternative. A good strategy help the organisation in allocating resources in the efficient manner. 2. Provide Direction - Organisations lose their purpose in absence of proper guiding strategies. Strategies direct an organisation to achieve its goals. 3. Synchronizes Activities - • The comprehensive strategy help the organisation in synchronizing the strategic initiatives taken at different levels.
- 11. . • 4. Facilitates Decision Making - • Strategy facilitates decision making as strategy and strategic initiatives act as a point of reference for any action. • 5. Help Accomplishing Goals - • Strategies enable a company to achieve its goals and create a market position by allocating resources, providing proper training to employees, enhancing the capacity of production etc. • 6. Improve Communication and Commitments - • Strategy helps in confirming company-wide actions communication and levels of commitment between different department of the organisation by giving a clear description of the vision and responsibilities. • 7. Enables Comparison of Alternative Actions - • Strategy ensures that the valuable resources are allocated optimally. Strategies helps in analyzing the record of previously adopted strategic initiatives and allow the top level management to compare the alternative actions and select the best option among them for different business units.
- 12. Nature of Strategy • The nature of strategy as explain by following points : • 1. Set of Actions - • Strategy is an arrangement of different action that are taken in verifying situation to achieve certain objectives or to solve some problems. • 2. Relates an Organisation with the Environment - • Formulating strategy is an important activity by which the enterprise can relate to its environment. With the help of strategy an organisation can interact with the factors of external environment so that the management can take necessary steps to achieve the organisational goals. • 3. Provide Structure - • Strategy develops a fundamental road map for providing guidance to the enterprise for making relation decisions and achieving organisational goals. Strategy used to establish and communicate the image of the organisation with the help of its various goals and objectives.
- 13. • 4. Future Oriented - • Strategy can be said that it is future oriented. Strategies are formulated to solve problems that are new and have not been previously handled by the organisation. • 5. Integrated Approach - • Strategy directs and support the enterprise in taking necessary decision for maximizing the strength and facing the environmental threats with confidence. A good strategy follows and interactive approach for allocating internal resources and using them for the benefit of the entire organisation. • 6. Involves Contradictory Actions - • Strategic actions are influenced by environment factors at times certain decisions taken on the basis of the strategy may be contradictory in nature. These actions may occur simultaneously or consecutively. • 7. Combination of Internal and External Factors - • Strategy tries to match the internal strength and meet external opportunity and threats. Therefore it is a combination of internal and external factors of the environment.