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Strategic Management

Strategic Management



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Published by api-3704742

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Published by: api-3704742 on Oct 18, 2008
Copyright:Attribution Non-commercial


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1. Explain the evolution, role and importance of business policy and strategic management. What would be the role of manager in this age?

Introduction: The term strategic management has been traditionally used. New title such as business policy, corporate strategy and policy, corporate policies is essentially and extensively used which means more less the same concept.

Evolution of Strategic Management:
In early 1920\u2019s and 1930\u2019s the managers used day-to-day planning
methods to perform any task.
2)To anticipate the future, they tried using tools like preparation of
budgets and control systems like capital budgeting and management by
3)The techniques were unable to emphasize the future adequately.
4)The next step was they tried using long range planning which was
replaced by strategic planning and later by strategic management.
5)In mid 1930\u2019s, according to the nature of business the planning was
done during Adhoc policy making.
6)As many businesses had just started operations and were mostly in a
single product line, there arose a need for policy making.
7)As companies grew they expanded their products and they catered to
more customer and which in turn increased their geographical coverage.
8)The expansion brought in complexity and lot of changes in the external
environment. Hence there was a need to integrate functional areas.
9)This integration was brought about by framing policies to guide managerial
10)Policies helped to have pre-defined set of actions, which helped people to
make decision.
11)Policymaking was the owner\u2019s prime responsibility.
12)Due to increase in the environment changes, in 1930\u2019s and 40\u2019s policy

formulation replaced ad-hoc policy making, which led to emphasis shifted to the integration of functional areas in this rapidly changing environment.

13)Especially after II World War there was more complexity and significant
changes in the environment.
14)Competition increased with many companies entering into the market.
15)Policy making and functional area integration was not sufficient for the
complex needs of a business.
1) Due to increase in the competition, in 1960\u2019s 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 lead to the concept of
4) In early sixties, this helped the management to manage between the
business and the environment.
5) In early eighties, as many companies were 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.

7) Strategic management focused on 2 aspects: -
Strategic process of business.
Responsibilities of strategic management.
8) Unlike others, in this phase the role of senior management is vital and of
utmost importance. Their role was important in decision-making like -

a) Whether a company promotes a joint venture/new decision.
b) Decides to go for an expansion.
c) Takes other important actions.

8) All these actions and decision had a long-term impact on the company and its future operations, which was the result of senior management decision-making.

9) Strategic management is both about the present and future course of
action, which was the prime responsibility senior management.

Strategic Management is
I. The study of function and responsibilities of senior management
II. A crucial problem that affects success in total enterprise.

III. The decision that determine the direction of the organization and shape

of its future
IV. Identity and molding of its character
V. Mobilisation and their allocation of the resources.

Hence as managers had variety of choices, decisions were based on the
circumstances, which would take the company in specified directions.
I. Strategic management integrates the knowledge and experience gained
in various functional areas.
II. It helps to understand and make sense of complex interaction in
various areas of management.

III. It helps in understanding how policies are formulated and in creating appreciation of complexities of environment that the senior management faces in policy formulation.

IV. Managers need to begin by gaining an understanding of the business
environment and to in control.
Here are few steps Indian managers need to do.
a) They should know to manage and understand information
technology, which is changing the face of business.
b) As public and common investors own and more companies
managers need to acquire skills to maximize shareholder value.

c) To have/take a strategic perspective, managers should foresee the future and track changes in customer expectation. Intuitive, logic reasoning is required for proper decision-making.

d) Successful companies depend on people. For people, management managers should create capability for imitating and manage things through leadership and should possess qualities like patience, commitment and perseverance.

e) Managers need to provide speed responses to environmental changes through informational systems and organizational process.

f) As corporates are becoming more integrated with the public life, corporate governance is becoming important which manager may have to practice.

g) Managers should learn to deal with confused and complex situations. They should know to deal with global managers, business protocols and market conditions.

h) In complex and certain situations, managers should have the
courage in decision-making to make unconventional decisions.
i) Managers should possess high ethical standards in business and
focus on social responsibility.

Thus we can say the purpose of strategic management is manifold. To be successful in the business one should possess/have holistic approach and should know to integrate the knowledge gained in various functional area of management. By having generalistic approach, a senior manager can understand the complex inter linkages operating within the organisation and


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