Emergence of Strategic Management Concept in the Corporate World

Akanksha Rao MBA 3rd Sem

1990s

Phases in Development of Concept of SM.

1980s Strategic Management

1970s Strategic planning

Corporate planning

1960s 1950s
Forecasting Two Three year forecasting of sales profits and capital requirements

Economic planning

Inward financial planning

SWOT Analysis

Strategic planning and strategy implementatio n

Strategic thinking and strategy implementation

Evolution Based on Practices

Hofer et al identified the four phase Paradigm of ad hoc Policy Paradigm of Planned Policy Strategy Paradigm Paradigm of Strategic Management

Paradigm of ad hoc Policy

(Till mid 1930s)
Initially the planning functions was

confined to short term and day to day operations Around 1930s , attempts were made to forecast comparatively longer future period Emphasis was made on ad hoc policy making

Paradigm of Planned Policy

(Between 1930s and 1940s)
The emphasis was put on integration of

policies in different functional area in the context of environmental needs. Long range planning was adopted which was based on forecasting the future by economic and technical tools. Plans used to be prepared by corporate planning staff independently.

Strategy Paradigm
(1960s)
With the increasing competition,

organizations were forced to adopt competitive strategies. The focus was more on strategic decisions based on environmental variables particularly competitive variables. The environmental analysis focused more on competitive environment.

Paradigm of Strategic Management

(From 1980s onwards) Competition internationalized because of increasing openness in the world economy. Strategic management emphasized two aspects: Direct involvement of top management in strategy formulation and resolving strategic issues. Comprehensive environmental analysis to develop likely future business scenarios.

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