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Strategy is the great work of organization. In situations of life or death it is the Tao of survival or extinction. Its study cannot be neglected. ----SUN TZU, The Art of War.2500 B.C Strategy is about winning. Strategy is not a detailed plan or program of instructions, it is a unifying theme that gives coherence and direction to the actions and decisions of an individual or an organization. Characteristic of a winning strategy Goals that are simple, consistent, and long term. Profound understanding of the competitive environment. Objective appraisal of resources. Effective implementation. Examples Kochouseph & V Guard Viswanathan Anand General Giap Dheerubhai Ambani Origin of the word Strategic means generalship in Greek. Stratos means “ army “. Ag means, “ to lead”. The concept of strategy was first given in the ART OF WAR by SUN TZU in China 500 BC There are 13 chapters in the book. Laying plans On waging war The-sheathed sword Tactics Energy Weak points and strong points Maneuvering Variations of tactics The army on the march Terrain The nine situations Attack by fire The use of spies. What is there in these chapters that can be adapted to Business? Sun Tzu says If you know the enemy and yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. SUN TZU says, Know the other and know yourself Triumph without peril Know nature and know the situation Triumph completely.
(oxford dic. (Alfred Chandler) A strategy is the pattern or plan that integrates organisations major goals.Some definitions of strategy The art of war. in a word. (KENNETH ANDREWS) Fundamental issues in SM. into favourable positions. The supervision of the continuous process of deciding the nature of the enterprise and setting.) The functions and responsibilities of choice of objectives. and action sequences into a cohesive whole. and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. mobilisation of resources. Financial control through operational and capital budgeting. anticipated changes in the environment. Influence the environment. and contingent moves by intelligent opponents Strategy is the pattern of objectives. Quest for global market share. diversification. Multidivisional structure. Business forecasting and investment planning models. Budgetary planning & control.( Kenneth Andrews. continuous monitoring of performance. Corporate planning. especially the planning of movements of troops and ships etc. Growth. stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be. Integration. Financial planning was the key. and portfolio planning matrices.) The determination of the long-run goals and objectives of an enterprise.) What business strategy is all about is. Rise of corporate planning departments. The sole purpose of strategic planning is to enable a company to gain. Corporate strategy thus implies an attempt to alter a company’s strength relative to that of its competitors in the most efficient way. A well formulated strategy helps marshal and allocate an organisations resources into a unique and viable posture based upon its relative internal competencies and shortcomings. 1960s. (KENICHI OHMAE. or goals. Purpose and missions Corporate objectives Choice of businesses Courses of action for achieving the objectives. 1950s. ROI. Portfolios of business Strategy. 1970s. competitive advantage. Preparation of short medium and long-term plans. as efficiently. Corporate strategy. It is the highest function of management. plan of action or policy in business or politics etc. Evolution of strategic mgt. purposes. Investment planning through project appraisal. Concerns of SM Future. revising and attempting to achieve its goals. Nature & scope of SM Route map for the organisation Decision guide Lays down growth objectives What to do how to do where to reach Look forward and far ahead Monitor environment anticipate change and prepare for the unexpected Build competitive advantage and build core competencies Not only anticipate future but shape future. allocation of such resources. policies. . DCF. a sustainable edge over its competitors. Environment. Creating competitive advantage and core competency Corporate strategy.
markets. Competing for standards. Market selectivity.Analysis of industry and competition. its controls and implications. Second. Knowledge management and organisational learning. The questions? How can the firm make money? This leads to What business or businesses should we be in? How should we compete? Answer to the first question describes “ corporate strategy “ and the second describes business (competitive strategy) Strategic management Strategic management is the study of such set of managerial decisions and actions that determines the long run performance of a firm. The virtual organisation. Investment in diversification Vertical integration Acquisition New ventures Allocation of resources between the different businesses of the firm. There are two ways to attain this. Late 80s & early 90s. This is also referred as competitive strategy. Understanding of problem. Business strategy. Competing on knowledge adapting to the new digital networked economy. its threats. The knowledge based firm. Appropriate decisions to implement the strategies evolved to achieve the desirable objectives. Corporate restructuring and business process reengineering. industry restructuring. allowing it to earn a return in excess of the industry average. Corporate strategy defines the scope of the firm in terms of the industries and markets in which it competes. Early mover advantage. Strategic innovation and the new economy. Corporate strategy decisions include. Choice of industries. Competitor analysis and PIMS (profit impact of market strategy). its nature. The quest for competitive advantage. The quest for critical mass. Sources of competitive advantage with in the firm. Re focusing and outsourcing Late 90s & early 2000. Corporate & business strategy Focus of strategic management shifted from planning process to quest for profit. A continuous monitoring and evaluation of the progress through the path to the goals . Organisational flexibility and speed of response. the firm may attain a position of advantage vis-a-vis its competitors with in an industry. Resource analysis of core competencies. and segments and positioning with in them. The firm may locate in an industry where favourable conditions result in the industry earning a rate of return above the competitive level.Late 70s & early 80s. The fundamental goal of business is to earn a return on its capital that exceeds the cost of capital. Business strategy is concerned with how the firm competes within a particular industry or market. Divestment. The major steps in the strategic management process are: Environmental analysis Strategy formulation Strategy implementation Strategy evaluation and control Why strategic planning? It gives a clear vision of internal and external environment of a business firm Focus on what is most important and how it is to be managed for success of business. Competitive advantage through strategic innovation. Active asset management. Alliances and networks.
Setting the corporate objectives Framing the broad aims of the corporation.Internal appraisal of the firm Assessing the firm’s capabilities/strengths & weakness in the various areas: Finance Operations Marketing R&D Human Resources General Management Developing the strength-weakness profile Appraising the individual business/strategic business units (SBUs) of the firm Identifying the competitive advantages and core competencies and developing the competitive advantage profile (CAP) Examining the capability gap (gap between existing capabilities and the ones needed for pursuing the spotted opportunities) 5. Clarifying the mission of the corporation Defining the business Surveying the environment Internal appraisal of the firm Setting the corporate objectives Formulating the corporate strategy Monitoring the strategy. using the corporate mission as the guide Examining the strategic planning gap and checking the growth-scope Fixing the growth objective Setting specific objectives in all major areas: Profitability Productivity Corporate Image Competitive Position R&D and Innovation Social Responsibilities Technology Human Resources . Policies Supplier Factors Govt.The strategic planning process The tasks in strategic planning. STRATEGIC PLANNING PROCESS 1.Surveying the environment Macro environmental factors Demographic Socio-cultural Economic Natural Technological Legal Environmental factors specific to business concerned.Defining the business 3. Industry & Competition Market/Customer Technology Political Govt. Policies Spotting the opportunities & threats Checking the attractiveness and probability position of these opportunities Highlighting those opportunities the pursuit of which will help the firm bridge its strategic planning gap Developing the opportunities-threats profiles (OTP) 4.Clarifying the mission of corporation 2.
Formulating the corporate strategy: exploring generic alternatives Examining which generic strategy the firm should opt for: •Stability? •Expansion? •Divestment? •Combination? Understanding the effect of the alternatives in terms of changes/additions/deletions to the firm’s existing product-market posture Clarifying the competitive advantage and synergy which each alternative would require/use 7. existing as well as new ones Clarifying what is expected of each SBU Allocating resources to the SBUs 8. the growth objective and CAP as the reference frame.Formulating the corporate strategy: strategy choice Evaluating the strategy alternatives Keeping the O-T profile. examining what strategy would be the best Reviewing the existing businesses Assessing the prospects of each SBU Examining what to do with each SBU Build? Maintain? Harvest? Divest? To what extent? At what pace? Examining. Monitoring the strategy Generic Value Chain FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT SUPPORT ACTIVITIES TECHNOLOGY DEVELOPMENT PROCUREMENT INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISITCS MARKETIN G & SALES SERVICE PRIMARY ACTIVITIES . which businesses are to be taken up Examining the resource requirement of the different strategy options and checking the resource availability Making the final choice of the strategy/strategy spectrum Translating the strategy in terms of what is to be done with each SBU Assigning the priorities to the SBUs. Prescribing the hierarchy/rank/priorities of the objectives 6.
--. The corporate mission is an expression of the growth ambition of the firm. . VI. Lends direction II. How does mission helps the firm I. —McKinsey & Co. Helps people at various levels in the corporation understand in what direction they should move. Project infinity – Coca Cola Mission Mission statement contains the ultimate purpose of the firm. to foster health. term it as strategic intent.Strategy Alternatives Stability Intensification Expansion Divestment Combination Diversification Market Penetration Market Development Product Development Vertically Integrated Concentric Diversification Conglomerate Diversification Forward Vision & mission Backward Vision is what the firm wants to be in future.Unilever To preserve and improve human life---Merck To help business corporations and governments to more successful. Such a view is often made explicit in a VISION statement of the company. targets and programs are formulated based on mission. Examples: To put a man on the moon by the end of the decade– Apollo program. IV. Helps prevent people falling into an activity trap. It is the firm’s future visualized. and to contribute to personal attractiveness that life may be more enjoyable for the people who use our products. Encircle Caterpillar – Kamatsu. V. Hamel and Prahalad. is to make cleanliness commonplace. Our vision is to dominate the global food service industry– McDonald. A vision statement gives aspiration and motivation besides guiding the formulation of strategy. to lesson work for women. A few mission statements The mission of our company. It also is the vision of the founders. Guiding the action at all levels. Gives focus III Objectives.
Micro –environment. Environmental analysis Macro environment. Major task environments are. Stock / owner groups Credit group Debt group Regulatory group. One out of the only two car companies in the country . A) Organisational structure b) organisational culture and work . socio. Task environment consists of all the work and people directly connected to firms activities. First motor car company in India.economic.HM Strength. Values proclaim the qualities it will cherish and what it will give to and expect from its people and society. politico. Analytical model SWOT – model. Strength.W or O / S – T where SA – strategic alternative. First collaboration with GM. To become a major player in the global chemical business and simultaneously grow in other growth industries like infrastructure ---RIL To become a $ 1 billion research based global pharmaceutical company --. The firm’s beliefs can also be found in the mission statement. Good product acceptability. It is the shared values that hold a firm together. Swot is used to identify core competency as well as lack of appropriate resources. competitors. technological and economic factors acting on the firm. Most suited for the then Indian roads.Ranbaxy Values & beliefs Organizational values are a major constituent of mission. Employees (manpower groups).legal. suppliers. It is values that hold the mission in tact. Built extensive dealer. Competitor groups. Swot is used to generate external factor analysis summery (EFAS) and internal factor analysis summery (IFAS) SWOT -. O is no O unless backed by resources. opportunities and threats. Monopoly and protected market. S is strength. customers. Task environment.c) organisational resources. employees. creditors. O – is opportunity. B) Task environment comprising shareholders. Buyer and seller groups. debtors. Acceptance in government and taxi market. repair and service networkThe GP-CK Birla group. T –threat. A) Socio cultural. weaknesses. government etc. O & T are external or macro environment and S & W are internal or microenvironment factors. SA = O / S.
They are also called CASH COWS. No shared values or beliefs.HM No mission. They are drags on company resources. Can failed to see customer needs and what competitors offered High labour cost and low productivity Failed to follow up the initial success of Lancer. or business units. Failed to see the environmental changes Did not anticipate competition. STARS. Stars and question marks are businesses that operate in high growth industries. moderately attractive. potentially attractive. products. Conflict between labour and management. Market Share High Low . Opening of the economy. Did nothing to counter the threat from Maruthi till it was too late Cling on the same product for 50 years without any major change. Truker was a flop. and DOGS to describe the above position. Deviated from core areas and core competencies. and least attractive based on growth rates and market share. No corporate strategy. In Threat Competition? Any other? BCG growth-share matrix BCG (Boston Consulting Group) is a simple way to analyse a firm’s portfolio of investments. vision or goals.Weakness -. QUESTION MARKS. The classification is most attractive. Question marks are also net users of resources but are in high-risk categories. Dogs are weak in market share and also in low growth market. Cash cows and dogs are businesses that operate in low growth industries. Stars are net users of resources but hold potential for future. A cash cow brings lot of cash to the company. Globalisation and upsurge in peoples aspiration level Good road network Export possibility Low labour cost JV and collaboration with world class motorcar companies. Opportunity GDP growth and boom in the car market.
Invest and develop such SUBs. If they are low the policy should be harvest / divest Business Strength/competitive Positions High Industry Medium Attractiveness Low . Industry attractiveness & Companies business strength. How attractive is the industry and how strong is the firm in the industry. If both are very strong such businesses needs more investment and allowed to grow.High Market Growth Star II Cash cow III ? I Dog IV Low GE multifactor portfolio planning matrix Different businesses or products are rated based on the following two parameters. If they are medium the strategy should be selective.
Each SBU will be under a separate CEO. It a scientific method of grouping the businesses of a multi business corporation to help planning. marketing. Both go hand in hand. grow and excel in a competitive market. HRM. It is a single business or collection of related businesses that can be planned separately from the rest of the company. or a combination. The superiority can be in any function such as manufacturing. CA is the back up of strategy. finance. . Without relevant CA strategy will not succeed. targets. Sources of CA: MARKETING FINANCE PRODUCTION R& D HR THE CEO & LEADERSHIP LOCATION & many more.Strong Average Weak SBUs. A SBU can be a separate corporation or a division in a corporation. and will be a profit centre SBU is for facilitating strategic planning and implementation and will be having their vision mission. knowledge. goals. For the strategy to work the firm should have competitive advantage. Thus competitive advantage is a superior position relative to competition. CA is a vital component of strategy. It is this superiority that enables the firm to survive. programs. CA is linked to strategy. Competitive advantage & core competence A competitive advantage is a position of superiority on the part of the firm in some function /factor/ activity/ in relation to its competition. or any factor of production can give a competitive advantage. Products/ businesses that are related in the standpoint of “ function “ are formed as a distinct SBU. Intellectual property. budgets and SOPs. Strategy can be used to create and excel CA.
Building CA By strategy By SWOT By bench marking By value chain approach. Vision is a statement of what a firm can do and what it wants to be. What business should we are in? Where should we locate? What product /service? How much capital & from where? What is the organisation structure? Who should be the key personnel? Basically these are the entrepreneurial decisions and these are taken buy the investors/ promoters. culture. . policy. Goal is a statement of what a firm wants to achieve. strategies. Ch. objectives. Strength is a CA only if it can affect the competition in an advantageous manner or bring in superiority in the market vis. Models like SWOT. Goals should be SMART. goal. This is known as CORE COMPETENCE. vision. Objective is a statement of what firm wants to achieve with definitive commitment on quantity and time frame. and policies. There for to keep up the position the firm should develop some unique strength. Policy is a broad guideline for decision making to link strategy formulation and strategy implementation Standard operating procedures is developed to control activities. Forecasting methods can also be used for finding the future trends and possible developments. A competency that lies at the root of products. Mission. SOP. Otherwise it will remain as strength. The firm will decide the vision. 10) Mission. This includes external (society and task) & internal (structure. Strategic management process Environmental analysisStrategy formulation Strategy implementation Evaluation and control Environmental analysis Understanding.is the purpose or reason for the firms’ existence. goals. analysing the external and internal environment of a firm. All strengths are not CA. (VSR. An enduring competency that cannot be easily imitated. The major decisions will be. Sops can be in the form of simple conventions or in detailed written manuals. By analysing value chain of self and competitor Core competence A firm may loose the CA as competitors will catch up after some time. mission. GE spotlight can be used for this.a. & resources) Strategy formulation (strategic planning) This is the planning stage.CA & Strength Strength is different from CA.vis the competitor. All CA are strength. objective.
In doing so. procedures. Concentrate on specific products. & firm infrastructure. legal. Strategy implementation Strategy is translated into action so that the objective of the strategy is achieved. planning. Strategy planning: objectives. assessment. Types of strategies Competitive strategy. operations. strategies. segments where it is good or superior. tactics. monitoring. Evaluation & control Evaluation and control is the most important part of strategic mgt.Strategy for stability Strategy for growth Strategy for retrenchment Competitive strategy Cooperative strategy. Mutual service consortia Joint venture Licensing agreement Value-chain partnership (inbound logistic. Strategy implementation: programmes. Strategic mgt. Strategic alliances. budgets. rules. HRM. outbound logistics. Generic competitive strategy (Michael Porter) 1) Overall cost leadership. The concept of core competency came out of this. and policies. A firm can achieve competitive advantage if it can supply its products / service at a lower cost than the competitors. How can one achieve this overall cost leadership? 2) Differentiation strategy. customers. finance. Policies. services. Cooperative strategy. This is achieved through cost leadership or differentiation strategy. accounting. It involves feedback. Supporting activities. Aimed at improving competitive position. Offer something unique or different. corrective decisions (sometimes involving total reversal or even abandonment) and implementation. process. assessment and control. Programs are drawn. Collusion. marketing and sales. govt & PR. Budgets are made. Evaluation & control: evaluation. process (summary) Environmental analysis: task environment factors & internal factors. and procedures. They are. procurement. 3) Focused strategy. . are formulated. technology development.) Firm infrastructure includes. Through brand creation and positioning.
Cut in cost Identify and stabilise at new level of profit / sales / production.Common features of competitive and cooperative strategies They are made by board of directors or managers Both are based on common principle of competitive position of a firm against competitors. (Vertical growth. It refers expansion of forms products to larger geographical areas or by increasing range of products or services. or a business unit or a particular product/ service or a particular market segment. . Diversification strategies: continuous growth may not be possible with vertical. As against this some companies out sources the entire value chain and have minimum vertical integration. They may be formed for entire company. Profit strategy. Horizontal growth results in horizontal integration. Its focus is on operational efficiency. Stability strategy. Turnaround strategy involve. in coop. Pause / proceed strategy. Concentration strategies. transfers resources and cultivates capabilities among its product lines and business units Distinction between cooperative and competitive strategy Cooperative strategy may modify organisational structure. stability.) Vertical integration can be full ownership of value chain to no ownership at all. No change strategy. Retrenchment strategies Turnaround strategy. forward integration. Major corporate strategies Directional: the firms overall orientation towards growth. Example Indian Oil and RIL. Concentric diversification refers to growth into a related industry. But competitive Strategy will not alter the organisation structure. they nullify competition but in competitive they face each other. Cuts in profit. synergetic. Improvement of operational efficiency. sales. Directional strategy Growth strategies: Mergers. Conglomerate strategy. a firm builds on its value chain. horizontal strategies alone. Acquisitions. backward integration. Portfolio: the industry or markets in which firm competes through its products and services Pareting: the manner in which the top management coordinates activities. or retrenchment. The search in concentric diversification is SYNERGY. Adopt growth strategies from new stabilised level. It is an important retrenchment strategy in corporate world. Both have opposite direction to face competition. Then the firm goes for diversification. The concept is that two will generate more profits together than they could separately. Cooperative strategy involve sharing. and production. Strategic alliances Two types of growth strategies can be seen. It refers to growth by diversification into an industry not related to its current line of business. friendly but competitive is unfriendly non-sharing and hostile. Diversification can be concentric or conglomerate. or takeovers.
Minimise weakness and avoid threats (defensive strategies) Forecasting techniques. Stage i simple. Disinvestments strategy. Forecasting is very crucial for all planning as all planning are for future. Captive company strategy. Organisation modification strategies. Among various models. They decide: The objective The overall goals and targets The product and service mix The capital and financial requirements Total sequence of how a firm has to perform. Some of the more important techniques are Brain storming Consultancy Delphi technique. objective and capital of the company. They are corporate strategies and hence decide the direction of the firm. Stage iii divisional. SO – strategy. Overcome weakness to take advantage of opportunities. Functional modification strategy: they may or may not alter the organisational structure. ST –strategy.Turnaround strategies are adopted in two steps 1 contraction 2 consolidation and growth at opportune time. Stage v mortality. Stage iv declining. staffing. They push the organisation from stage I to stage ii or stage ii to stage iii They may require the restructuring of the objective . They also govern all functional strategies such as for marketing. Organisational strategies Organisational strategies are such strategies that are made at board level. Organisation life cycle. TOWS matrix model is used most widely. Generation of strategic alternatives Generation of strategic alternatives Short listing the feasible strategies Comparative evaluation of feasible strategies Selection of best strategy. They are regarded as MASTER STRATEGIES. WT – strategy. transportation etc. Steps involved in generating strategic alternatives. Stage ii functional. They bring functional modifications with or without capital restructuring. Entrepreneurial turnaround strategy. Organisation modification can be brought in one of the following ways. Use of strength to take advantage of opportunities. Use strength to face threats. production. strategies Organisation modification strategy: they modify the organisation structure including the hierarchy. Important org. WO –strategy. Efficiency turnaround strategy. This is the top most level and is headed by CMD.
It requires situations like. Advantages are. increased market. assets liabilities. Disadvantages are conflicts. Functional & organisational modifications on mergers Instead of two boards only one board. less legal and statutory constraints. and all other resources of two companies stand merged into a new legal entity. Shares of old companies are collected and cancelled and new shares of the new company is issued Restructuring of the organisation is carried out including shifting of personal Work duplication is avoided. (HP. synergy. the operational responsibility. In a JV the respective strengths are shared to overcome a weakness or exploit a new opportunity In international business JV is one of the most popular forms of organisations because it has the least financial. good will. political and legal constraints as a mode of entry. merger nullify competition Two firms cooperative and merger will consolidate their cooperation Two companies are from the same industries Same or partially same board of directors Synergic or complementary.Compaq). The new company will adopt town policies Staff relocation is carried out as needed Physical shifting of fixed assets or manpower is normally not done. and in technology transfer fewer advantages to stronger party. loss of control operations from the respective JV parties. Disadvantages are: liabilities and bad debts are transferred to new company. Merger involves MOU statement and declaration that earlier entities are no more in existence and the shares. The ownership. synergy and bring growth for both parties. consolidation. Merger is a process-involving establishment of a single corporate body by merging resources and technologies of two different bodies performing competitive or cooperative business in the same industry. Equal size Competitive firms. the risk and rewards are shared in agreed manner through a promotional agreement. Staffing can create problems.They may alter the method and persons making strategic decisions they may bring about capital restructuring They change the staffing patterns They may alter the ownership pattern Mergers. Usually there is a droppage of share prices in the stock market Frequent mergers lead to inconsistencies in strategy formulation and implementation Joint ventures Joint venture is a cooperative business activity formed by two or more separate organisations for strategic purposes crating an independent entity. Advantages are flexibility. more resources. technologies. . A new company is formed with new name. Advantages & disadvantages. nullification of competition.
International subcontracting is a huge area in which business is developing very fast. adjustment problems. It is also called VIRTUAL ORGANISATION because it is composed of a series of functional. insurance. less risky especially in international contest. Consortia It is a loose partnership between companies in similar or allied industries who pool their resources to undertake specific tasks. least gestation period. loans. delete. Advantages are easy entry. Against an attempt by a hostile takeover the owners may try to get a friendly takeover or bring a “ white knight “ and handover control. Typical consortia working can be seen in R & D activity. Most functions of DEL COMPUTERS is carried out through a network organisation. Various functions on the value chain is subcontracted to take advantage of the cost difference in factors of production in different locations in the world. The organisation is only a shell electronically connected to some completely owned division. Take over Take over is a form of acquisition. The first company is called the franchiser company and the company that uses the name of the franchiser is called the franchisee Fast growth. The BPO is mostly based on subcontracting. . project. services and operating systems of the parent company. fast growth. Networking In recent years a new and radical type of organisations have emerged with network structure. least capital.Acquisition This is a method of growth in which a strong company acquires all the assets and liabilities of another company. market coverage. and easy to add. Such organisations will outsource most of the functions.. supply groups or collaborations or partnerships linked and constantly changing . For ex. new products or technology transfer. Most companies do it in different degrees. partially owned subsidiaries. and can be done by buying shares from market and taking over the control with or with out the consent of the owners. corporate growth. developmental work of various types. Com. synergy. Franchising It is an agreement under which a company grants right to other company to open an establishment using the name. Disadvantages are cultural conflicts.the cobweb like networking is non-hierarchical in nature but each one doing its specified function in the value chain. In a takeover the owners lose their ownership/ control of the company against their wishes. Subcontracting Sub contracting is a form of outsourcing the work to outside organisation or individuals. Acquisitions are made for specific objectives like capital investment. and other independent companies. disband and relatively less costly. erosion in market image if ownership change is frequent. brand. products. and mutual benefit. Virtual organisation is most dynamic. Amason. flexible.
It is not enough to have strategic planning. patents. Form networks. The business units (SBUs) are not clearly identified. Deliver results. Regular reviews of strategies. It should be successfully implemented. Cooperate. Managers are inadequately prepared for strategic planning. Developing and communicating planning premises. Continuing emphasis on planning and implementing strategy. The information for preparing the plans is insufficient for planning for action. Major reasons for failures. Communication of strategies to all key decision making managers. The reviews of the strategic plans of the business units are not done effectively. Creating a company climate that forces planning. new leadership model. Build enthusiasm. relationship building. waging competitive battle) is shifted to more feminine qualities. The leadership needs of the organisations are. driving strategies.Licensing Licensing is an arrangement. (listening. The old leadership style was more macro or masculine (strong decision making. Strategic management. The link between strategic planning and control is insufficient. Influence others. Use information. And the required competencies of business leaders are: Business literacy Creativity Cross cultural effectiveness Empathy Flexibility Pro-activity Problem solving Relation building Team work Vision . Making organisation structure fit planning needs. Successful implementation of strategies. which are known as IPRs. Development of contingency strategies and programs. wherein a company licences other companies to produce and or sell a product developed by it Licensing is based on copy right. The following are eight recommendations for successful implementation. and nurturing). The model today is not so much “ take it on your shoulders “ but “ create the environment that will enable others to carry part of the burden. Action plans contributing to and reflecting major objectives and strategies. the ability to : Build confidence. The goals of the organisation are too vague to be of value. leading the troops. trademarks.
win The theory of rational choice: In any given situation the decision. A strategic game is a model of interacting decision– makers.maker chooses the best according to her preferences. conscientiousness. but Mottu gets four years and vice versa. she will be set free. collaborating. as every other available action. For each player. Win – lose. The players in the game move according to their perception of their best advantages. For each player a set of actions. Because of the interaction we call them players. in terms of the ability to read and understand ones emotions and asses ones strengths and weaknesses. Social awareness in relation to sensing others emotions (empathy) reading the organisation (organisational awareness) and recognising customers needs.Need is EQ for leaders. and managing change and conflict GAME THEORY A game is a competitive activity in which players contend with each other according to a set of rules. Each player has a set of possible actions. the theory is. Can use game theory to illuminate economic. integrity. The theory of rational choice – a decision maker chooses the best action according to her preferences among all the actions available to her. Win -. The action chosen by a decision maker is at least as good. Lose – win. initiative. What will MOLLY and MOTTU do? . Based on this they can be. and achievement orientation. according to her preferences. political.. If molly confesses. A set of players.e. and building relationships with others. A strategic game consists of. and biological phenomena. Competitive. communicating. Lose – lose. If both confess. (Service orientation) Social skills in relation to influencing and inspiring others. the list of all the players’ actions. Self awareness. Each player has preferences about the action profile i. If both keep quite they will get only one year each as evidence is only for a minor crime. Strategic games. preferences over the set of action profiles The prisoner’s dilemma. If there are several equally attractive best actions. Self-management in terms of control. or cooperative. Two suspects Molly and Mottu are caught in a major crime and put in separate cells. and have positive self worth. both will get three years.
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