SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE.

SUBJECT: TOPIC:

STRATEGIC MANAGEMENT. STRATEGIC MANAGEMENT & POLITICAL ENVIRONMENT.

GROUP NO.: SUBMITTED TO:

06. PROF, JAYA GHEMANANI.

SUBMISSION DATE:

1ST. FEBUARY, 2012.

GROUP MEMBERS.

NAMES Diksha Mirani. Chander Chawla. Kanchan Valecha. Pawan Nagdev. Sudhir Satav. Vikshetha Jain. Vivek Teli. Harshada Palve.

ROLL NO. 41. 42. 43. 44. 45. 46. 47. 48.

ACKNOWLEDGMENT.
We are very thankful to prof. Jaya for giving us such opportunity to present the topic strategic management & political environment before her as a group project, we learnt a lot during making this project. During the project we gain a lot of knowledge about the ethics and regulation in auditing profession And we are now very well prepared for all that and all the credit goes to prof. jaya as she is the one who gave us this topic to present.

Index.

SR.NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

CONTENTS. Introduction to strategic management &

political environment. Meaning of strategic management & political environment. Concept of strategic management & political environment. Process of strategic management & political environment. Political environment. Role of strategic management & political environment. Importance Approaches Advantages of to of strategic strategic strategic management management management & & & political environment. political environment. political environment. Dis-advantages of strategic management & political environment. Conclusion.

INTRODUCTION:
Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of rms in their external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders. Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Strategic management includes not only the management team but can also include the Board of Directors

and other stakeholders of the organization. It depends on the organizational structure. Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.

MEANING OF STRATEGIC MANAGEMENT & POLITICAL ENVIRONMENT:

The strategic management process means defining the

organizations 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 its competitors; and fixes goals to meet the entire present and future competitors and then reassesses each strategy.

CONCEPTS OF STRATEGIC MANAGEMENT & POLITICAL ENVIRONMENT:

Strategic management can depend upon the size of an organization, and the proclivity to change of its business environment. These points are highlighted below: As A global/transnational organization may employ a more structured strategic management model, due to its size, scope of operations, and need to encompass stakeholder views and requirements. An SME (Small and Medium Enterprise) may employ an entrepreneurial approach. This is due to its comparatively smaller size and scope of operations, as well as possessing fewer resources. An SME's CEO (or general top management) may simply outline a mission, and pursue all activities under that mission.

STRATEGIC MANAGEMENT PROCESS HAS FOLLOWING FOUR STEPS:

1. 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. 2. 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.

3. STRATEGY

IMPLEMENTATIONorganizations chosen strategy into action. structure, Strategy implementation resources, includes designing the organizations distributing developing decision making process, and managing human resources. 4. 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 organizational makes strategy sure as that well as the its

implementation meets the organizational objectives.

POLITICAL ENVIRONMENT:
Politico-legal forces allocate power and provide laws and regulation that may constrain or protect the business. The factors to be considered are:  The political system and its features like nature system, ideological forces of the power.  The political structure, its goals and stability.  Political process like party systems, elections, funding of elections and legislation in economic and industrial matters and regulations.  Political philosophy, role of government in business and its policy approach towards economic and business development. With the developments on the political front affecting the economy all the time, the economic environment often becomes a byproduct of the political environment. Legislations regulating the business are the byproduct of the political configuration. In addition to government and legislative measures, media, social and religious organizations and lobbies of various kinds are also a part of the political environment. They collectively exercise a huge influence on the conduct of business in a country. of the political

political parties and sentries of

ROLE

OF

STRATEGIC

MANAGEMENT

&

POLITICAL

ENVIRONMENT:
1. Due to increase in the competition, in 1960s there was a demand for critical look at the bane corrupt of business. 2. The environment played an important role in the business. 3. The relationship of business with the environment leads to the concept of strategy. 4. In early sixties, this helped the management to manage between the business and the environment. 5. In early eighties, were as many companies globalised

which lead to the competition of the rivals access the world. 6. Japanese companies along with other Asian companies unleashed a force across the world and posed a threat for the US and European companies, which led to the current thinking.

IMPORTANCE OF STRATEGIC MANAGEMENT IN POLITICAL ENVIRONMENT:

1. Strategic management & political environment take into account the future and anticipate for it. 2. A strategy is made on rational and logical manner, thus its efficiency and its success are ensured. 3. Strategic management & political environment reduces frustration because it has been planned in such a way that it follows a procedure. 4. It brings growth in the organization because it seeks opportunities. 5. Strategic management also adds to the reputation of the organization because of consistency that results from organizations success. 6. Often companies draw to a close because of lack of proper strategy to run it. With strategic management & political environment companies can foresee the events in future and thats why they can remain stable in the market. 7. Strategic management looks at the threats present in the political environment and thus companies can either work to get rid of them or else neutralizes the threats in such a way that they become an opportunity for their success. 8. Strategic management focuses on proactive approach which enables political environment to grasp every opportunity that is available in the market.

APPROACHES TO STRATEGIC MANAGEMENT & POLITICAL ENVIRONMENT:

In general terms, there are two main approaches, which are opposite but complement each other in some ways, to strategic management & political environment: Todays business management is highly competitive. Simple methods and approaches on budget oriented planning or forecast based planning are not enough for an organization particularly large organization to survive and develop. There is a need for strategic business management for assessment of the business environment, formulation of strategies, its implementation, evaluation of progress and taking adjustments to stay healthy in business. The first vital approach to the management of business strategy is the strategic planning process covering mission the and corporations objectives, and

environmental scanning, strategy formulation/implementation, evaluation and control. Basically speaking strategic management & political environment has two approaches: (1) The Industrial Organization Approach. (2) The Sociological Approach.

ADVANTAGES TO STRATEGIC MANAGEMENT & POLITICAL ENVIRONMENT:

1. Taking an organization-wide,

proactive approach to a changing global world. 2. Building an executive team that serves as a model of crossfunctional teamwork. 3. Having an intense executive development and strategic orientation process. 4. Defining focused, quantifiable outcomes measures of success. 5. Making intelligent budgeting decisions. 6. Clarifying your competitive Reducing conflict; or horizontal

advantage. 7. 8. empowering the organization. Providing clear guidelines for day-to-day decision making. 9. Creating a critical mass for change.

DIS-ADVANTAGES

TO

STRATEGIC

MANAGEMENT

&

POLITICAL ENVIRONMENT:
1. UNANTICIPATED attempts to

RESULTS:

Strategic

management

predict the future.

Unfortunately, however, the future cannot always be predicted. A major environmental, political or financial crisis can create radically different results from those that the firm has anticipated. Additionally, predictions can be difficult to make in an environment characterized by rapid change. In these situations, strategic management can actually have a negative impact on a firm.

2. LACK OF SHORT-TERM RESULTS: Strategic management is focused on long-term results. Investors, however, are interested in short-term management results. often Strategic involves

creating short-term losses in order to create long-term value for the firm. These short-term losses can drive down the value of a business and can create a serious risk of bankruptcy.

3. POOR ADAPTABILITY: In business, it is important to be able to react to the environment. Strategic management can make a firm extremely bureaucratic and rigid. This leaves the firm unable to react to changes, meaning that the firm cannot take advantage of opportunities or avoid threats.

4. DIFFICULTY:

Strategic

management is not an easy task to take on. Developing and implementing a strategy for a business requires highly trained and specialized individuals. Most business strategists have a master's degree or doctorate in the discipline. These individuals can be costly to employ and as can outside consulting firms which specialize in strategic management.

Strategic Management &political environment yields great rewards when approached and conducted properly. Many factors contribute to this strategic success. As we have determined, one of the huge payoff factors is how well an organization. In contrast to other major factors such as external environmental forces over which an organization has little control, Team Structure and Behavior can become, over time, almost entirely within the control of the leadership of an organization. In addition, a body of "Best Practices" now exists to elevate significantly the "art" of strategic management. So, you chose to read on beyond the opening paragraph. Hopefully, you now see the potential in an expanded way. The crucial question remains, "What will be your response?" Will you revise the structure of your teams? Will you adopt some of the best practices? Will you read the books cited? What action will you take?