Strategic Management(1)The concept of StrategyIntroduction
– The top management of an organization isconcerned with the selection of a course of action from amongdifferent alternatives to meet the organizational objectives. The process by which objectives are formulated aand achieved isknown as strategic management and strategy acts as the means toachieve the objective. Strategy is the grand design or an overall‘plan’ which an organization chooses in order to move or reacttowards the set of objectives by using its resources. Strategies mostoften devote a general programme of action and an implieddeployed of emphasis and resources to attain comprehensiveobjectives. An organization is considered efficient andoperationally effective if it is characterized by coordination between objectives and strategies. There has to be integration of the parts into a complete structure. Strategy helps the organizationto meet its uncertain situations with due diligence. Without astrategy, the organization is like a ship without a rudder. It is like atramp, which has no particular destination to go to. Without anappropriate strategy effectively implemented, the future is alwaysdark and hence, more are the chances of business failure.
Meaning of strategy –
The word ‘strategy’ has entered in thefield of management from the military services where it refers toapply the forces against an enemy to win a war. Originally, theword strategy ha s been derived from Greek, ‘strategos’ whichmeans generalship. The word as used for the first time in around
400 BC. The word strategy means the art of the general to fight inwar.The dictionary meaning of strategy is “the art of so moving or disposing the instrument of warfare as to impose upon enemy, the place time and conditions for fighting by one self”In management, the concept of strategy is taken in more broader terms. According to Glueck,
“Strategy is the unified,comprehensive and integrated plan that relates the strategicadvantage of the firm to the challenges of the environment andis designed to ensure that basic objectives of the enterprise areachieved through proper implementation process”
This definition of strategy lays stress on the following – a)Unified comprehensive and integrated plan
b)
Strategic advantage related to challenges of environment
c)
Proper implementation ensuring achievement of basicobjectivesAnother definition of strategy is given below which also relatesstrategy to its environment. “Strategy is organization’s pattern of response to its environment over a period of time to achieve itsgoals and mission”This definition lays stress on the following – a)It is organization’s pattern of response to its environment b)The objective is to achieve its goals and missionsHowever, various experts do not agree about the precise scope of strategy. Lack of consensus has lead to two broad categories of
definations:strategy as action inclusive of objective setting andstrategy as action exclusive of objective setting.Strategy as action, inclusive of objective setting – In 1960’s, Chandler made an attempt to define strategy as “thedetermination of basic long term goals and objective of anenterprise and the adoption of the courses of action and theallocation of resources necessary for carrying out these goals”This definition provides for three types of actions involved instrategy :a)Determination of long term goals and objectives b)Adoption of courses of actionc)Allocation of resourcesStrategy as action exclusive of objective setting – This is another view in which strategy has been defined. It statesthat strategy is a way in which the firm, reacting to itsenvironment, deploys its principal resources and marshalls itsefforts in pursuit of its purpose. Michael Porter has definedstrategy as
“Creation of a unique and valued position involvinga different set of activities. The company that is strategicallypositioned performs different activities from rivals or performssimilar activities in different ways”
The people who believe this version of the definition call strategy aunified, compreshensive and integrated plan relating to thestrategic advantages of the firm to the challenges of theenvironment
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