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STRATEGIC MANAGEMENT: Evolution, Concept and Application.

Roohullah Khalil Imad Khan

STRATEGIC MANAGEMENT

The word strategy is derived from Greek word strategos which means generalship.
First used in Military and Politics. For the first time used by Napoleon Shakespeare Machiavelli

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After the world war 2 the word strategy is used in business world.

There are some definitions of strategy.


Means to an ends. Resources allocation.

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Strategic management present disciplines are industrial organization administrative behaviour marketing.

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Herbet simon presented a theory of intra organization and extra organizational relation in the late forties. Extra organizational relations moved into the business world and become the wave of late sixties. Fit between the internal and external environment factors become central to the business policy paradigm.

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Business evolved from product orientation to market orientation and single function orientation to multi function orientation. Because of the changing needs of market.

Advance technology. Reasons:

Acquisitions. Mergers.

Concepts of strategic management.

The Long Range Planning. Strategy. Strategic Management.

The Long Range Planning


Begins in 1960. Before long rang planning simple financial

projections were using in the business.


There are two reasons for successfulness of long

rang planning at that time Stability Less competition

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Through long rang planning data analysis answered questions about the reasons of success of some companies and the reasons of failure of other companies. Than the concept of strategy "gained ground.

Strategy..

By 1970s long range planning is conceptualized as strategic planning.


Strategic planning contains Vision Mission SWOT analysis One time fit between environment and strategy.

Strategic Management
By the early 1980s, some executives began to feel that the return on their investment in the development of large strategic planning departments had been a disappointment. Also, the increase in computer technology and globalization of industries caused increased complexity in those industries, and the strategic models of the 1960s and 1970s could not deal with the complex dynamics of the new marketplace.

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Strategic management is the process by top management determines long run direction and performance of the organization by ensuring that careful formulation, proper implementation and continuous evaluation of strategy take place. It is driven by

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Values of top management Past performance External and internal environmental factors.
Concepts

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Change in I.T and environment. Fit between strategy and environment.

Competitive advantage is iterative and continous.

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The underlying concept behind managing a business strategically is that the firm has to position itself optimally by continually striving to maintain fit between the firms strengths and opportunities. And the firm further success depend on how early the fit is obtained and how is the fit.

Role of top management


For a strategic management process going the top management must play active role. The must display vision, possess leadership qualities, identifying and solving problems and removing obstacles. Top management must involve in intelligence and data gathering and developing resource relationship.

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According to Pruchansky and Scott in real life situation strategy is a function of top management values, environmental factors, resources of company, goals and current strategies(VERGS). Acccording to Carnegie school strategy is a function of top management values and cognitive basis.

In business successful general managers are those who can muddled through with a purpose. Such decision makers keep themselves as informed as possible focus time and energy play the power game know the art of imprecision and are good conceptualize and analyst.

Indian Model

Shrivastava studied thirty two organizations and developed four model of strategic decision making. Managerial autocracy, simple and centralized Systemic bureaucracy, bureaucratic organization Adoptive planning, professional organization Political expediency, participative decision making

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Technology planning, forcasting resource requirement and commercialization should all be integrated into over all strategic decision making. Technology myopia can be overcome by involving technical persons in the development of technology strategy.

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The human resource department should also be mobilize to provide leadership in the area of strategic decision making without loosing sight of its functional specialization.

Implementation
Success of strategic management process lies in the successful implementation of strategic decision. Organization are amorphous process of influence in decision making. (Herbert Simon) It is therefore not a simple task to implement a game plan that is strategy, that itself evolves over time and continue to change and make shape.

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Company should develop a strategic issue management issue to also respond to contingencies. Companies may response actively or passively through instrumental or symbolic forms. Companies are therefore required to anticipate problems make contingency plan allocate resources and keep communication lines clear and open between strategies formulation and strategies implementers.

McKinseys 7-Ss

A fit is therefore required among McKinseys 7-Ss and higher level of sophistication the McKinsys 7Ss are Strategy Structure Staff System Style Skills Shared values

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According to Brodwin and Bourgeois there are five approaches to strategy implementation: The commander approach The organizational change approach The collaborative approach The culture approach The crescive approach All of these approaches are applicable in different settings and according to level of development of organization.

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Successful implementation calls for good leadership, high developed problems solving skills, internal marketing skills, project team and task forces that would report directly to the top management. Workable strategic management/decision making process/models have to be custom designed and tailored to the requirements of specific organizations.