UNIT 1 .

INTRODUCTION TO STRATEGIC MANAGEMENT

A.Evaluation of Strategic Management and Business Policy

B.Strategic Management Process Model

C.Understanding Strategy

D.Level at which strategy operates

E.Strategic Decision Making

F.Introduction to Strategic Management

G.Element s in Strategic |Management Process

H.Model

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A. Evaluation of Strategic Management and Business Policy
2. 1911 –Harvard Business School : An Integrative Course in Management aimed
at the creation of General Management Capability.
3. 1959 – Gordon and Howell Report sponsored by the Ford Foundation,
recommended a comprehensive course on Business Policy which will give
students an opportunity to pull together what they have learned in the separate
business fields and utilize this knowledge in the analysis of complex business
problems.( Pierson Report by Carnegie Foundation also supported the view)
4. 1969 – American Assembly of Collegiate Schools of Business(Like AICTE)
made the Business Policy course mandatory requirement for the purpose of
recognition.
5. India : IIM’s followed American Business Schools. 1990 –AICTE prescribed the
Business Policy. Association of Indian Management Schools made it as
compulsory course.
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B. Strategic Management Process Model by hambrick and fredrickson

Arena: Where will be we active? INTERNAL &

Vehicles: How will we get there? External
Differentiators: How will we win Strategic
in the market? Analysis
Staging: What will be our speed
and sequences of moves?
Logic: How will we obtain our
returns? STRATEGY:
ARENAS
VEHICLES
IMPLEMENTATION
DIFFERENTIATORS
GOALS & LEVERS AND
VISION &
STAGING STRATEGIC
MISSION OBJECTIVES
LOGIC LEADERSHIP

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C. Understanding Strategy

• Strategy is derived from a Greek word ”strategos” – means generalship –

the actual direction of military force.
• A plan or course of action or a set of decision rules making a pattern or
creating a common thread.
• Strategy is the means to achieve objectives

Sun Tzu : The Art War

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 4. Level at which strategy operates
LEVELS OF MANAGEMENT
LEVELS OF STRATEGY
CORPORATE CORPORATE
CORPORATE
OFFICE

SBU BUSINESS
LEVEL

SBU A SBU B SBU C

FUNCTIONAL FUNCTIONAL LEVEL

FINANACE MARKETING OPERATIONS HRM INFORMATION

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 4. Level at which strategy operates
LEVELS OF MANAGEMENT
LEVELS OF STRATEGY
CORPORATE CORPORATE
TVS GROUP

SBU BUSINESS
LEVEL

SUNDARAM
LUCAS TVS TVS MOTRS
FASTNERS

FUNCTIONAL FUNCTIONAL LEVEL

FINANACE MARKETING OPERATIONS HRM INFORMATION

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5. Strategic Decision Making

Objectives to be achieved are determined

Alternative ways of achieving the objectives are

identified

Each alternative is evaluated in terms of

Not objective achieving ability
Simp
The best alternative is chosen
le in
reali
ISSUES IN STRATEGIC DECISION MAKING
ty ?! 1. CRITERIA 2. RATIONALITY
3. CREATIVITY 4. VARIABILITY
5. PERSON RELATED FACTORS
6. INDIVIDUAL V/S GROUP DECISION

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6.Introduction to Strategic Management
S.M IS “THE DYNAMIC PROCESS OF FORMULATION, IMPLEMENTATION,
EVALUATION AND CONTROL OF STRATEGIES TO REALISE THE
ORGANISATION’S STRATEGIC INTENT”.

FOUR PHASES IN SM PROCESS

1. ESTABLISHING STRATEGIC INTENT
2. FORMULATION OF STRATEGIES
3. IMPLEMENTATION OF STRATEGIES
4. STRAYEGIC EVALUATION

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A. Establishing the hierarchy of
strategic intent
• Creating and communicating
a vision
• Designing a mission
statement
• Defining the business
• Adopting the business model
• Setting Objectives
C. Implementation of strategies
• Activating Strategies
• Designing the structure,
system and process
• Managing functional
implementation
• Operationalising strategies
B. Formulating Strategies
• Performing environment
appraisal
• Formulating corporate level
strategies
• Formulating business level
strategies
• Undertaking strategic analysis
• Exercising strategic choice
• Preparing Strategic Plan
D. Performing strategic
evaluation and control
• Performing strategic
evaluation
• Exercising strategic control
• Reformulating Strategies
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 7. Comprehensive model of strategic management

STRATEGY
STRATEGIC FORMULATION STRATEGIC
INTENT IMPLEMENTATION
Environmental Organizational
•Project
•Vision
Appraisal Appraisal
•Procedure
•Mission
•Resource
SWOT ANALYSIS Strategic
•Business allocation
CORPORATE LEVEL
Definition •Structual, Evaluation
STRATEGIES
• behavioural,
•Business BUSINESS LEVEL STRATEGIES
functional &
Model STRATEGIC ANALYSIS AND
Operational
CHOICE
•Objectives
STRATEGIC PLAN

Strategic Control
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