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4.

Role of Managers in Strategic Management


A strategic manager is a person who analyses the major initiatives taken by a company’s top management on behalf of owners,
involving resources and performance in internal and external environments.
Since Strategic Management is all about taking crucial decisions having long term implications of the organization in mind, the role
of Strategic Manager is all the more important. The Strategic Manager tries to answer the following questions:
 Why does the organization exist?
 Vision and Purpose of the organization
 With what ambition does the organization wish that it should be seen by those who are associated with it?
 Mission of the organization
 Who are the clients or customers and the competitors of the organization or what is the boundary of the organizational
functioning?
 Scope and framework of the organization(quality and price keeping in mind the competitors’ price)
 What is the organizational Strategic Capability?
 Understanding with regard to the organizational resources, competences, or the key success factors(developing products
and technologies
 Against what parameters and yard sticks existing strategy would be evaluated and when to modify? Selection criteria and
follow up action (check deviations, corrective measures, parameters- cost, gestation period)
Strategic managers discharge the following roles:
 Role as an entrepreneur or a risk taker
 Role as an efficient resource allocator
 Role as a monitor or scanner of an environment
 Role as a prudent trouble shooter or disturbance handler Strategic Management

5. Importance of SWOT analysis


SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a very effective tool for the analysis of
environmental data and information – for both, internal (strengths, weakness) and external (opportunities, threats) factors. It helps
to minimize the effect of weaknesses in your business, while maximizing your strengths. SWOT analysis can help you gain insights
into the past and think of possible solutions to existing or potential problems — either for an existing business or new venture.
SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it involves a great subjective element. It is
best when used as a guide, and not as a prescription. Successful businesses build on their strengths, correct their weakness and
protect against internal weaknesses and external threats. They also keep a watch on their overall business environment and
recognize and exploit new opportunities faster than its competitors.
Importance of SWOT
 It is a source of information for strategic planning.
 Builds organization’s strengths.
 Reverse its weaknesses.
 Maximize its response to opportunities.
 Overcome organization’s threats.
 It helps in identifying core competencies of the firm.
 It helps in setting of objectives for strategic planning.
 It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out.
 SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive
environment in which the firm operates.

7. Stability Related Strategies


Stability strategy implies continuing the current activities of the firm without any significant change in direction. If the environment
is unstable and the firm is doing well, then it may believe that it is better to make no changes. A firm is said to be following a stability
strategy if it is satisfied with the same consumer groups and maintaining the same market share, satisfied with incremental
improvements of functional performance and the management does not want to take any risks that might be associated with
expansion or growth.
Types of Stability Strategies
 Pause/Process with caution strategy – Some organizations pursue stability strategy for a temporary period of time until the
particular environmental situation changes, especially if they have been growing too fast in the previous period.
Sometimes, firms that wish to test the ground before moving ahead with a full-fledged grand strategy employ stability
strategy first.
 No change strategy – No change strategy is a decision to do nothing new i.e. continue current operations and policies for
the foreseeable future. If there are no significant opportunities or threats operating in the environment, or if there are no
major new strengths and weaknesses within the organization or if there are no new competitors or threat of substitutes,
the firm may decide not to do anything new.
 Profit strategy – Profit strategy is an attempt to artificially maintain profits by reducing investments and short-term
expenditures. The profit strategy is usually the top management’s short term and often self serving response to the
situation.

8. Techniques of Strategic Control


Strategic control is a way to manage the execution of your strategic plan. As a management process, it’s unique in that it’s built to
handle unknowns and ambiguity as it tracks a strategy’s implementation and subsequent results. It is primarily concerned with
finding and helping a firm adapt to internal or external factors that affect their strategy, whether they were initially included in the
strategic planning or not.
Premise Control
Every organization creates a strategy based on certain assumptions, or premises. As such, premise control is designed to continually
and systematically verify whether those assumptions, which are foundational to your strategy, are still true. These are typically
environmental (e.g. economic or political shifts) or industry-specific (e.g. new competitors) variables.
Implementation Control
This type of control is a step-by-step assessment of implementation activities. It focuses on the incremental actions and phases of
strategic implementation, and monitors events and results as they unfold.
There are two subcategories of implementation control:
 Monitoring Strategic Thrusts Or Projects
 Reviewing Milestones
Implementation control can also take place via operational control systems, like budgets, schedules, and key performance
indicators.
Special Alert Control
When something unexpected happens, a special alert control is mobilized. This is a reactive process, designed to execute a fast and
thorough strategy assessment in the wake of an extreme event that impacts an organization.
Strategic Surveillance Control
Strategic surveillance is a broader information scan. Its purpose is to identify overlooked factors both inside and outside the
company that might impact your strategy.

1. Define Business Policy. Describe the characteristics of business policy


Definition of Business Policy
Business Policy defines the scope or spheres within which decisions can be taken by the subordinates in an organization. It permits
the lower level management to deal with the problems and issues without consulting top level management every time for
decisions.
Business policies are the guidelines developed by an organization to govern its actions. They define the limits within which decisions
must be made. Business policy also deals with acquisition of resources with which organizational goals can be achieved. Business
policy is the study of the roles and responsibilities of top level management, the significant issues affecting organizational success
and the decisions affecting organization in long-run.
Features of Business Policy
An effective business policy must have following features-
1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become difficult.
2. Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There should be no misunderstandings
in following the policy.
3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the subordinates.
4. Appropriate- Policy should be appropriate to the present organizational goal.
5. Simple- A policy should be simple and easily understood by all in the organization.
6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.
7. Flexible- Policy should be flexible in operation/application. This does not imply that a policy should be altered always, but it
should be wide in scope so as to ensure that the line managers use them in repetitive/routine scenarios.
8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of those who look into it for
guidance.
9. Policies act as guidelines to managers to resolve recurring problems, so as to attain predetermined objectives.
10. Policies help the management to delegate duties to subordinates with full confidence that these duties will be carried out
strictly as per the policy decisions.
11. The effective policies help the executives to know how others will act and this will help them to have better coordination in
achieving the well formulated objectives.
12. Policies should be properly implemented by trained managers and executives in right time so as to attain the results.
13. Policies deal with the nature and process of choice about the future of the business activities. These policies are to be
handled by the top level and middle level executives.
14. Policies are not a set of rigid of clear-cut rules and regulations instead they are living precepts guiding an enterprise to
continue within the set pattern of behavior.
15. They are overall guides determining the direction of managerial action subject to policy restrictions.
16. Policies further cover the wide field of product mix and market mix guiding the enterprise as to how much and what type
of products to be manufactured and its channels of distribution.
17. Policies provide guidelines for subordinates and are framed to suit a specific situation.
18. Policies are general statement of principles for achieving predetermined goals through guiding actions by executives at
different levels.
19. Policies are multipurpose in nature. Their functions include:
20. Avoiding confusion.
21. Providing guidelines at all levels.
22. enabling the enterprise to run smoothly without any hindrance,
23. Helping management to achieve maximum utilization of human resources and material resources.
24. Policies decide the course of action for all other functional areas of management and they act as formal agreement to be
followed strictly at all levels in the organization before taking any decision.
25. Business Policies govern the planning, decision making, coordination, direction, control and other managerial functions.

2. What do you mean by Social Responsibility of Business? Give your arguments in favor and against social responsibility
Social responsibility of business implies the obligations of the management of a business enterprise to protect the interests of the
society. According to the concept of social responsibility the objective of managers for taking business decisions is not merely to
maximize profits or sharehold­ers’ value but also to serve and protect the interests of other members of a society such as workers,
consumers and the community as a whole.
Social responsibility requires managers to consider whether their actions are likely to promote the public good, to advance the basic
belief of society, to contribute to its stability strength and harmony.” Social responsibility refers to the voluntary efforts on the part
of the business to contribute to the social well being. The moral idea behind this is that the businesses use resources of the society
so they must give something back to the society.

Arguments Supporting Social Responsibility


1. The justification for existence and growth: The primary goal of business is to make profits as only profits can help the
business sustain and expand. Profits should only be made as a return of service to the society by producing goods and
services.
2. The long-term-term interest in the firm: A firm is to gain maximum profits in the long run if it has it’s the highest goal as
service to society. As humans are social beings, when they notice that a particular corporation is not serving it’s the best
interest socially, they do not support the organization further.
3. Avoidance of government regulations: Government is the highest authority in the nation. When a government feels that
the business is not socially responsible or is creating problems like pollution, the government limits its freedom.
4. Maintenance of Society: Business is one of the important pillars on which society survives. It is the responsibility of business
to take care of society’s needs. Law alone can’t help people with the issues they face. Therefore businesses contribute to
the well being, peace and harmony of society.
5. Availability of resources with Business: Business enterprises have huge financial resources, very efficient managers &
contacts and thereby they can ensure that a social problem can be solved easily.
6. Converting problems into opportunities: Business means risk. And turning risky situations into profits can also be related to
solving social problems.
7. Holding Business responsible for Social problems: Business enterprises are responsible for many problems such as pollution,
discriminated employment, corruption, etc. It is the duty of the business to solve the problems created by them.

Arguments against Social Responsibility


1. Violation of maximization of the profit motive: This statement argues that business exists only for maximizing profits and
businesses fulfill their social responsibility best by maximizing profits by increasing efficiency and reducing costs. They need
not take up any additional obligations.
2. Side effects on Consumers: Customers suffer because of the solving social problems and taking social care requires huge
financial investment. As the money within the business is used in social help, the business increases the cost of their
products and services.
3. Lack of Social skills: It is often stated that businessmen don’t fully under the social problems and thus can’t solve them
efficiently.
4. Personal resistance: People tend to dislike interference from businesses in their problems.