STRATEGY

AND
STRATEGIC
MANAGEMENT
LECTURE 2

Introduction
Business

strategy provides a bridge

between the basic concept of human
resource management
and strategic
human resource management.
Strategic intents master the present
and pre-empting the future as well as
convey the strategic fit.
So, a background of strategy is essential
for building strategic management and
strategic HRM.

What is Strategy?
A strategy is an integrated and coordinated

set of commitments and actions designed to

exploit core competencies and gain a
competitive advantage. - Ireland, Hoskisson
and Hitt (2011)

Strategy

consists of the combination of

competitive moves and business approaches
that mangers employ to please customers,
compete
successfully
and
achieve
organizational
objectives.
Aurther
A.
Thompson and A.J. Strickland(2005)

What is strategy?
Strategy is a framework of critical

ends and means. Boxall, 1996.

Origin of Strategy
The word strategy is derived from the
ancient Athenian position of Strategos.
Stratos means army and agein means to
lead.
So, strategy was meant as coordination and
synergy among the various units of army in
a close formation to win the war.
Thus, Strategy is the science and art of
military command as applied to the overall
planning and conduct of large scale combat
operations.

Dimensions of Strategy
Strategy is a coherent, unifying and

integrative pattern of decisions.

Strategy is a means of establishing

an organization's purpose in terms of

long-term objectives.

Strategy is a response to external

opportunities and threats and to

internal strengths and weaknesses as
a means of achieving competitive
advantage.

Dimensions of Strategy
Strategy

is a logical system for

differentiating managerial tasks at
corporate, business and functional
levels.

Strategy is a definition of a firms

competitive domain.

Strategy

is

a definition of the
economic
and
non-economic
contribution the firm intends to make

Hierarchy of Strategic
Intents
Vision
Mission
Goals

Objectives
Strategies

Associated Concepts of Strategy

Competitive Advantage
Creating value for firms customers and

go ahead of competitors in the market by

continually improving its position through
differentiation and focus.
Distinctive capabilities
Distinctive
capabilities
are those
characteristics that can not be replicated
by competitors or can only be imitated
with great difficulty.

Associated Concepts of
Strategy
These are also known as core

competencies of a firm.
Strategic Intent
It refers to the expression of the
leadership
position
that
the
organization wants to attain and to
establish a clear criterion on which
progress
towards
goal will be
measured.

Associated Concepts of
Strategy
Strategic Capability.
It is the ability of a firm to develop and

implement strategies that will

achieve
sustained competitive advantage. It is the
capability
of
managers,
and
other
resources.
The Resource-based View
This view of strategy refers to the resource
capability of a firm to renew, augment,
and adapt its core competencies over time.

Associated Concepts of
Strategy
Strategic Management
It is the set of decisions and actions

resulting
in the formulation and
implementation of strategies designed
to achieve the objectives of an
organization.
Strategic Goals
Strategic goals are the end destinies
where the firm wants to attain.

Associated Concepts of
Strategy
Strategic Plans
Strategic plans are formal

expressions of how an organization

intends to attain its strategic goals.

Formulation of Strategy
Strategy formulation is not as rational and

as linear a process that some people

describe but complex and comprehensive
process.
Approaches to Strategy Formulation
1. Classical approach that believes
strategy formulation is a rational process
of deliberate calculation that separates
strategy formulation from implementation.

Approaches to Strategy
Formulation
2. Evolutionary approach believes

that strategy formulation is a product of

market forces
in which the most
efficient and productive organizations
win through.
3. Processual approach
believes
that
strategy
formulation
is
an
incremental process that involves
through discussion and disagreement.

Approaches
4. Systemic approach believes

that strategy is shaped by the social

system in which it is embedded.

The Classical Process of Strategy Formulation

1. Define the
mission.
2. Set objectives .
3. Conduct internal and
external environment
analysis or scanning.
4. Analyze existing strategies
to determine their relevance in
the light of the internal and
external environment analysis.

The Classical Process of Strategy Formulation

5. Define distinctive
capabilities of the firm.
6. Define the key
strategic issues .
7. Determine corporate
and functional strategies
for achieving goals and
competitive advantages.
8.
Prepare
integrated
strategic
plans
for
implementing strategies.

The Classical Process of Strategy Formulation

9.
Implement
strategies.

the

10. Monitor implementation and

revise
existing
strategies
or
develop
new
strategies
as
necessary.

Concept of Strategic
Management
Strategic

management is a
stream of decisions and actions
which leads to the development
of an effective strategy or
strategies
to
help
achieve
corporate objectives.

William
F.
Glueck
and
Lawrance.

Strategic management : Concept

Strategic management refers to

the managerial process of forming a

strategic vision, setting objectives,
crafting a strategy, implementing
and executing the strategy, and
then
initiating
corrective
adjustments
in
the
vision,
objectives, strategy and executions
that are deemed appropriate.
- Thompson and Strickland (2010).

Significance of strategic
management
Strategic

management allows firms to

anticipate
changing conditions of both
internal and external environment to craft
effective corporate and operational decisions.

Strategic management

makes firms best

performer as it gives clear objectives and
directions to the employees and to the firm.

Significance of strategic management

Strategic

management enhances the

problem prevention capabilities of the firm
as managers are aided by effective
forecasted
future
situations
and
appropriate action plan.
Strategic management helps uncovering
the best available alternatives through its
group-based strategic decisions.
Strategic management clarifies the role
differentiations among participants that
bridge up the gapes and removes overlaps
in activities.

Significance of strategic
management
Strategic

management
reduces
the
resistance to change as people are
prepared for the change with strategic
planning and actions.

Strategic

management
increases
capabilities to cope with opportunities
and threats as well thought out action
plans are made and implemented.

Realities of Strategic Management

Strategic management is emergent and

flexible.
It is not realized by formal statements but
also comes about by actions and reactions.
It is a description of a future orientated
action that is always directed towards
change.
It is conditioned by the management
process itself.