Comprehensive Model of Stratehic Management:

Issues in Strategic Decision making:

1. Criteria for Decision making

2. Rationality in decision making

3. Creativity in decision making

4. Variability in decision making

5. Person related factors in decision making

6. Individual Versus Group Decision making

Strategic Business Units: It is group of businesses within firm with specific strategic
missions. A business unit is a section or department of a business that runs as an autonomous
entity. All SBUs (small business units) are a single business (or collection of businesses),
have their own competitors and a manager accountable for operations, and can be
independently planned.
Factors influencing Objective Setting:

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There are four factors identified by Gluck which must be considered while
setting objectives. They are:

Forces of the environment

Realities of an enterprise`s resources and internal power relations
Values of the top executives
Awareness of past objectives by the management

How to set Objectives (or) Defining objectives using the Balanced Scorecard
The Balanced Scorecard, developed by Kaplan and Norton at Harvard University,
provides an excellent framework for defining goals and objectives and translating
them into specific measures. Objectives defined using this framework are
Balanced in that they are defined from four perspectives:
The Customer Perspective emphasizes satisfying the needs of customers.
The Financial Perspective emphasizes the stakeholder concern about how
efficient and effective the unit is at using its resources.
The Internal Business Perspective emphasizes excellence at performing internal
processes and in employee competencies.
The Innovation & Learning Perspective emphasizes continuous improvement
and the creation of value.
The Scorecard measures the achievement of objectives.
Start by making a list for each objective of what is measured currently and
what else could be measured.
Select those measures that present the most complete indication that the
objective is being achieved.
Try to limit the number of measures to no more than six per objective and be
sure to measure results and desired outcomes, rather than processes.
The measures you select will be your Key Performance Indicators.
Critical Success Factors (CSFs) are those things that most affect industry members' ability
to prosper in the marketplace - the particular strategy elements, product attributes, resources,
competencies, competitive capabilities, and business outcomes that spell the difference
between profit and loss and, ultimately, between competitive success or failure.
Issues in objective setting

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 Multiplicity - It deals with different number and different types of
objectives w.r.t. organizational level (higher/lower), ends
(survival/growth), functions (marketing/finance) and nature
(organizational/personal).

Periodicity - Objectives can be long-term or short-term.

Verifiability - Each objective is tested on the basis of its verifiability.
Reality - Objectives can be official and operative. Official objectives
are those which an organization professes to attain while operative
objectives are those which an organization seeks to attain in reality.

Quality - Objectives can be good or bad on the basis of its

capability to provide specific direction and tangible basis for
measuring performance.

Specifically - Objectives may be stated at different levels of

specificity. Example at macro level as goals and as target at the
micro level.

Differentiate between Goals & Objectives

1) Time Frame:
Objectives are timeless, enduring, and unending;
goals are temporal, time-bound, and intended to be superseded
by subsequent goals
2) Specificity:
Objectives are stated in broad general terms, dealing, with
matters of image, style and self-perception. These are
aspirations to be worked in the future.
Goals are much more specific, stated in terms of particular result
that will be accomplished by a specific date.
3) Focus:
Objectives are usually stated in terms of some relevant
environment which is external to the organization
goals are more internally focused
4) Nature:
Objectives are more generalized statements like maintaining
market leadership, striving continuously for technological
superiority, etc.
A goal may imply a resource commitment requiring the
organization to use those resources in order to achieve the
desired outcomes.
5) Measurement:
Both objective and goals can be stated in terms, which are
quantitatively measured, but the character of measurement is
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 different. Generally quantitative objectives are set in relative terms.

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