Strategic Management Unit-1 by Prof. Vivek V. Wankhede

Department of MBA
Strategic Management
Topic: Evolution of Strategic Mgmt.

Sub Topic :- Preview Cases; Background
Presented By:
Prof. Vivek Vinayakrao Wankhede
Assistant Professor in Dept. Of MBA
MBA(Marketing + HR), MA (Psychology-p), BE(Bio-Medical), B.Ed
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BY PROF. VIVEK VINAYAKRAO WANKHEDE

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Strategy Evolution at Bharti Airtel
• Launch of R-Jio in Sept 2016, with Free Offerings
• Telecom Market Slow Down post 2010
• Voice market – Saturation; Data services – Growth Phase
• Strict Norms, Heavy Investment
• Lowest average Revenue per User in world
• Bharti Airtel, 1195, 403 Million Subscribers, Dec 2019
• 18 Countries in Asia and Africa
• “to create globally admired telecommunication company”
• “to enrich lives of customers, Our obsession is to win
customers for life through an exceptional experience”
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Strategy Evolution at Bharti Airtel
• Structured in 5 SBUs
• Mobile Services
• Home Services
• Airtel Business
• Tower Infrastructure
• Digital TV Services
• Strategic Alliances with global companies (for access to
finance and established brand)
• Suicidal acquiring Zain in Africa; 15 quarter loss
• Acquired data-centric spectrum, through M&A
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Evolution of Strategic Management
• Business Policy, older term
• Harvard Business School, 1911
• Gordon & Howell Report in 1959, Ford Foundation
• Pierson Report, Carnegie Foundation
• 1969 it was made mandatory by Association to Advanced
Collegiate Schools of Business
• Strategic Decision making is core of managerial activity

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• Perspective Schools
 conception process / formal process / analytical process
• Descriptive Schools
 visionary / mental / emergent / negotiation / collective /
reactive process
• Integrative schools
 Process of transformation

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• Ansoff
management of discontinuous change, which takes
account of psychological, sociological, political and
systemic characteristics of complex organization
• Toffler
Organizations no longer responsible for only profits or
producing goods but for simultaneously contributing to
the solution of extremely complex ecological, moral,
political, racial, sexual and social problems
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4 Fundamental Questions (Rumelt)
• How do firms behave?

• Why are firms different? (USP)
• What is the function of or value added by the headquarters
unit in a diversified firm?
• What determines success and failure in national or
international markets?

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Ultimate Focus
• Internal Environment
• External Environment

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Azhar Kazmi, 5th Edition
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Topic: Understanding Strategy

Sub Topic :- Concepts and Levels at which strategy operates
Presented By:
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In our Previous Class
• Strategy Evolution at Bharti Airtel
• Evolution of Strategic Management / Business Policy
•Descriptive Schools
• Ansoff / Toffler
• 4 Fundamental Questions (Rumelt)
• Ultimate Focus
 Internal Environment
 External Environment
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The Concept of Strategy
• Strategy derived from Greek word „strategos‟ generalship
 a plan
 a course of action, {current position to desired position}
 a set of decision rules making a pattern
 creating a common thread, related to org. activities
{derived from policies, objectives and goals}
 resources necessary for implementing plan
 making trade-off creating a fit
 planned and actual coordination to
continuously co-align with environment
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• Strategy derived from Greek word „strategos‟
generalship
 to achieve objectives {over simplified}
• One should never blindly follow concepts of strategies{a

real student of strategy will always remember this}

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• A model can never be a true reflection of reality
• Discretion is certainly the better part of valour.

Knowing is ok but being cautious is our basic duty

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Levels at which the strategy Operates
Profit Centers or SBUs {Strategic Business Units}
• “any part of a business organization which is treated

separately for strategic management purpose” –
Sharplin
• SBUs are involved in single line of business

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SBA {Strategic Business Area}
• “a distinctive segment of the environment in which the

firm does (or may want to do) business”

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https://www.business-to-you.com/levels-of-strategy-corporate-business-functional/

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Corporate Level Strategy
• overarching plan of action covering the various functions

performed by different SBUs
 deals with objectives of company
 allocation of resources among SBUs
 coordination of SBUs

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SBU or Business Level Strategy
• comprehensive plan providing objectives for SBUs

 allocation of resources among functional areas
 coordinating among functional areas

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Functional Level Strategy
• relatively restricted plan providing objectives for a

specific function
 allocation of resources among different operations
 coordinating among operations

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Operational Level Strategy
Example:
Marketing Strategy (functional level)
Can be sub-divided in sales, distribution, pricing, product,
and advertising strategies

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Societal Strategies
• Strategies at level higher than corporate-level

• Based on mission statement
• how corporation relates itself to the society in terms of
a particular need or set of needs that it strive to fulfil
#example: to provide alternative sources or energy for
society at optimum price

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Reference:

Understanding Strategy article by Warnock Davies
https://www.investopedia.com/terms/s/strategic-management.asp
https://www.business-to-you.com/levels-of-strategy-corporate-business-functional/
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Topic: Decision Making

Sub Topic :- Strategic Decision Making
Presented By:
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In our Previous Class#1
• Ultimate Focus
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• Concept of Strategy
•Complex(a lot many things)
•Simplified (achieving objectives)
• What my real student will do?
• Limitations of Strategy
• SBU / SBA
• Corporate Level/ Business Level/ Functional Level
• Societal Level / Operational Level

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Strategic Management Definition
the dynamic process of
• formulation
• implementation
• evaluation and
• control of strategies
to realize organization’s strategic intent

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Decision Making
# Crackers or No Crackers
# Match with Pakistan or No Match
# Job or Start-up
# White Socks or Black
# Girl Friend or Wife
# Cadbury or Nestle
# Get up or Not
# Brush before bed or not

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2 major dimension of Decision Making
# The first considers whether the decision maker can influence

the terms and the outcome {CONTROL}
# The second addresses whether the aim is to do well or to do

better than others. {PERFROMANCE}

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Decision research has produced good advice for routine

choices and judgments, such as personal investment
decisions, where people are choosing among the
products before them, have no ability to change them,
and are not competing with anyone. For these decisions,
research has shown, it’s important to avoid common
biases.

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But strategic decisions, such as entering a new market
or acquiring another company, are completely different.
=> Executives can actively influence outcomes.
=> Success means doing better than rivals.
For these decisions, executives need more than an
ability to avoid common biases.
They require a talent for clear-eyed analysis

and the ability to take bold action.

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Research on Decision Making is being done a lot

Managers do not use it that much.
‘Decision’ The same term is applied to routine as well as

complex deliberations, to both small-stakes bets and
high-stakes commitments, and to exploratory steps as
well as irreversible moves.

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Strategic decision-making refers to identifying the

best way to achieve goals and objectives.
These goals and objectives are long-term, and strategic
decision-making assists in describing a company's main
objectives to achieve shorter-term goals with a broad
mission.

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# The first considers whether the decision maker can influence

the terms and the outcome {CONTROL}
# The second addresses whether the aim is to do well or to do

better than others. {PERFROMANCE}

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# {CONTROL}
# {PERFROMANCE}

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# {CONTROL} – Low or High
# {PERFROMANCE} – Absolute or Relative

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Investment in
Competition
Gambler’s Fallacy
Sunk Cost Fallacy

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Decision makers need to develop two vital skills.
First, they must be able to discern the nature of the decision at
hand. {a talent for clear-eyed analysis}
Second, they need to respond with the appropriate approach,

able to act now as a psychologist, then as a tactician, next as a
riverboat gambler, and perhaps once again as a psychologist.
{the ability to take bold action}

Importance of Strategic Decision Department of MBA
* gives companies a competitive advantage.
* assist in pursuing knowledge and skills
* assist in solving problems
* used in the planning process in which managers settle on what
goals a company will follow and what resources would best be
implemented to achieve those goals.

Effective Ways of Strategic Decision Making Department of MBA
Identifying
the Need
Collecting
Taking
Evidence or
Action
Information
Choosing
Finding
the Best
Alternatives
Alternative

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Strategic decision making is about choosing the best path to
success. For instance, if you’re starting a new business, you need to
consider factors like cost, time and the target market. How do you
classify decisions to reach the ideal solution? Strategic decision
making will help you formulate a plan of action and align your
small-term goals with the big picture.

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If you master the art of making a strategic decision, you’ll be able
to overcome any barrier in your personal and professional life.
Decision-making in your personal life often requires you to reflect
on your past experiences and future aspirations. But professional
decision-making is all about thinking with a level head and
considering more than one factor at a time.

Reference: Department of MBA
https://hbr.org/2013/11/what-makes-strategic-decisions-different
https://study.com/learn/lesson/strategic-decision-making-management-
process.html#:~:text=Strategic%20decision%2Dmaking%20refers%20to,goals%20with%20a%20broad%20mission.
https://harappa.education/harappa-diaries/strategic-decision-making/
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Presented By:
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Topic: Strategic Management Level

Sub Topic :- Introduction
Presented By:
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• Ultimate Focus
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• SBU / SBA

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• Strategic Management Definition
• Decision Making
• 2 Major Dimensions of Decision Making
• Control
• Performance
• 4 Field Grid of type of decision
• Importance of Decision making
• Effective Ways of Strategic Decision Making

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• formulation
• implementation
• evaluation and

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The 5 Phases of Strategic Management
Strategic management involves managing an
organization's resources, analyzing internal and
external forces, and developing strategies to
realize goals and objectives. There are five key
phases that can help businesses execute their
strategies.

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An organization must first establish clear, realistic
goals. Its goals should answer what the company
wants to achieve and why. Once set, the company
can then identify the objectives, or how the goals
will be reached. During this phase, the company
can articulate its vision and long and short-term
goals.

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Organizations must then be able to examine,
understand, and codify what internal and external
forces affect their business and goals, as well as
what it needs to remain competitive. Analytical
tools, such as SWOT analysis, are helpful during
this phase.

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Based on the results of the analysis, the company can
then develop its strategy, outlining how the company
will achieve its goals and how in this phase, the company
will identify the needed people, technology, and other
resources; how these resources will be allocated to fulfill
tasks, and what performance metrics are needed to
measure success. It is also critical to gain buy-in from
stakeholders and business leaders.
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Once the strategies are defined, it is time for
execution. The strategy is taken from planning to
implementation. During this phase, the allocated
resources are placed into action based on their
roles and responsibilities.

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The final stage of strategic management is to
evaluate the effectiveness of implemented
strategies using defined metrics. The company will
also visit whether ineffective strategies should be
replaced with more viable ones. The company
should continue to monitor the business landscape
and internal operations, as well as maintain
strategies that have proven effective.
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Example of Strategic Management
Consider a large company that wants to achieve more

ambitious online sales rates. To meet these goals, the
company will develop a strategy, communicate this
strategy, apply it across various units and departments in
the organization, integrate this with employee goals, and
execute accordingly. If an effective strategy is applied,
ideally, it will help the company achieve its targets
through a single, coordinated process.
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Key Elements of Strategic Management
Strategic management is not a one-size-fits-all
strategy. However, there are key elements that are
found to be critical. These include goal setting,
industry and organizational analyses, strategy
formation, strategy implementation; and the
measurement, monitoring, and controlling of
strategies.

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Handy Tip
Strategic decision making aligns short-term
objectives with long-term goals, and a mission that
defines your company's big picture purpose.
Shorter term goals are expressed in quantifiable
milestones that give you the capacity to measure
your success and your adherence to your vision.

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Major Levels of Strategic Management

• Mission Vision
• Long Term Goals
• Short Term Goals

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Mission Vision
– the reasons you exist as a business.
- Your business may be dedicated to providing
environmental solutions, or you may simply want
to make as much money as possible.
- if you know what you want over the long term,
you'll be better positioned to infuse these aims
and principles into your daily decisions.
- Start by writing your mission and your vision.
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Mission Vision
This statement can be as simple or complex as you
wish, depending on the degree of formality you
use in your everyday business decisions as you run
your company.
Even if your mission is only one sentence – the act
of thinking about and articulating this sentence
will help you develop a better idea of what you
want.
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Mission Vision
Having this written statement will also enable you
to communicate your long-term vision to your
employees and to other stakeholders, to get them
on board with the strategic decisions you make.

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Long-Term Goals
Long-term goals are the concrete embodiment of your
mission and vision. A vision is an idea, and long-term
goals are expressions of how these ideas play out –
with milestones and real-world objectives. These goals
are critical to the strategic decision-making process,
because they guide your choices, and provide
measurable and quantifiable ways to assess whether you
are successfully aligning your company's direction with
the values you've articulated to guide your business.
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Long-Term Goals
If your business designs environmentally friendly
technologies, you might create a long-term goal of
wanting to be carbon-neutral within five years.
With this goal in mind, you'll then make strategic
decisions aimed at reducing your carbon footprint
during that time.

Short-Term Goals Department of MBA
It's easy to lose sight of the strategic decision-making
process when you're focusing on short-term goals and
decisions that concern day-to-day activities and issues.
Short-term goals and decisions usually relate to
immediate needs, such as improving cash flow so that
you can cover outstanding bills. Despite the immediacy
and urgency of these goals, your strategic decision-
making process should still enable you to proceed with
an eye toward both your vision and your longer term
objectives.
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Short-Term Goals
If your values are centered around sustainability,
and your company's official company car dies, it
would be more consistent with your mission to
finance a fuel-efficient replacement than to buy a
cheap gas guzzler.

https://smallbusiness.chron.com/key-concepts-strategic-management-organizational-goals-10234.html
https://www.investopedia.com/terms/s/strategic-management.asp
https://www.techtarget.com/searchcio/definition/strategic-
management#:~:text=Strategic%20management%20is%20the%20ongoing,assess%20their%20strategies%20for%20succ
ess.
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Topic: Hierarchy of Strategic Intent:

Vision, Mission, Business Model
Presented By:
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• Ultimate Focus
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• SBU / SBA

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• Decision Making
• Control
• Performance

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• 5 Phases of Strategic Management
• Examples of SM
• Key elements of SM
• Levels of SM

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• formulation
• implementation
• evaluation and

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Comprehensive Model of SM

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Comprehensive Model of SM

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Strategic Intent
*coined by Hamel & Prahalad
*purposes the organization struggle for
*it lays down a framework within which firms
would operate, adopt a predetermined direction
and attempt to achieve their goal

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Hierarchy of Strategic Intent
Corporate Level (Broadly) Vision & Mission

Business Level Business Definition and Model
Operational Level (Precise) Goals & Objectives

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Strategic Intent of TATA Steel
Vision
Mission Values
Objectives Enablers *KPI

*Specific Goals
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Definition of Vision
“Description of an organization / a corporate
culture / a business / an individual / a technology /
an activity in future”
– Kotter, 1990
“Category of intentions that are broad, all-
inclusive, and forward thinking”
– Miller & Dess, 1990

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Vision
• To become a General Manager managing a SBU in
a large, diversified multinational corporation
• To become an Entrepreneur owning your own
company in 10-15 years dealing with IT services
employing cutting-edge technology to serve a
global clientele
• These are an Individual’s Vision

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Definition of Mission
An action-based statement that declares the
purpose of an organization and how they serve
their customers.
This sometimes includes a description of the
company, what it does, and its objectives. A
mission statement is a short summary of your
company's purpose.
Purpose or reason for the organization’s existence
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Examples of Mission Statement
https://alessiobresciani.com/foresight-strategy/51-
mission-statement-examples-from-the-worlds-
best-companies/
Small Activity Start collecting Vision Mission statements of

#Companies you like
#Companies whose product you use

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How to form Mission Statement
• Most organizations derive their mission statements from a
particular set of tasks they are called upon to perform in the
light of their individual, national or global priorities.
• Corporate philosophy is what organization follows in its
strategic and operational activities
• Such philosophy may not be formally written
but gradually evolve due to entrepreneur’s
actions

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Derek Abell’s 3-Dimension
Customer Group Who is being satisfied? Groups formed
as per the identity.
Customer Functions What is being satisfied? What the product
or service provide for the customer
Alternative technologies How the need is being satisfied?
Manner in which functions can be
performed for the customer
It’s a Customer Oriented Approach

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Business Model
“the logic of the firm, the way it operates and
how it creates value for its stakeholders”
“A representation of a firm’s underlying core logic

and strategic choices for creating and capturing
value within a value network”
Combine elements to reinforce each other

Dimensions of Customer Department of MBA
Dimension
Business Model
How does the
organization make
Benefit money? Financial
Dimension How does the Dimension
organization get
customers?
How does the
organisation sustain
its business?
Value-added Partner
Dimension Dimension

Dimensions of Business Model Department of MBA
Customer Benefit Value-added Partner Financial
Dimension Dimension Dimension Dimension Dimension
Segments Products Resources Partner Revenues
Channels Services Skills Channels Expenses
Relationships Values Processes Relations

Examples of Business Model Department of MBA
Buy Commodity; add mark-up price, sell at retail

Subscription Model (regular & predictable)
Earn from Advertisements
Freemium for limited version, charge for upgrade
Companies in same industry can adopt different

strategies

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Topic: Goals & Objectives
Presented By:
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• Ultimate Focus
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• SBU / SBA

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• Decision Making
• Control
• Performance

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• Examples of SM
• Levels of SM

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• Comprehensive Model of SM
• Strategic Intent, Hierarchy
• Vision
• Mission
• Abell’s 3-Dimensions
(Customer group; functions; Alternative Technologies)
• Business Model (Dimesions and Examples)

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• formulation
• implementation
• evaluation and

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Goals
What an organization hopes to accomplish in a future period
of time. Generalized statements (Qualitative)
Represent future state or outcome of current efforts
Various financial & non-financial issues are addressed by

the goals that a firm sets.

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Objectives
Ends that state specifically how the goals shall be achieved.
Concrete and Specific (Quantitative)
Objectives makes Goals Operational
Measurable and Comparable

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Set of Goals
Choice from
these Goals
Elaborate as
Operational and
Measurable
Objectives
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Roles of Objectives
 define the organization’s relationship with its environment
 help organization pursue its vision and mission
 provide the basis for strategic decision-making
 provide the standards for performance appraisal
If one does not know where he has to go; any path will
take him there.

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Characteristics of Objectives [SMART]

 Understandable
 Concrete & Specific
 Related to Time Frame
 Measurable & Controllable
 Challenging
 Different objectives should correlate with each other
 Set within constraints

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Important questions in terms of Objectives

 What objectives are chosen for achievement?
 How are the objectives determined?

What Objectives are Set? Department of MBA
• Objectives to be set for all those performance areas, which
are of strategic importance.
Drucker’s 8 Vital Areas
• Market Standing
• Innovation
• Productivity
• Physical & Financial Resources
• Profitability
• Manager Performance & Development
• Worker Performance & Attitude
• Public Responsibility
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From
Azhar
Kazmi

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From
Azhar Kazmi

Critical Success Factor (CSF) Department of MBA
• Strategic factors or Key factors for Success
• High Manufacturing Quality; Cost Efficiency;
Sophisticated Retailing; Flexible Product Mix; Creation of
Product Image
Shoe Manufacturing Company
• Speedy Dispatch, Reliability, Price
Courier Service
• Different Industries or Companies can have separate CSF

Key Performance Indicator(KPI) Department of MBA
• Metrics / Measures in terms of which CSF are evaluated
• High Manufacturing Quality
•Product Recall Rate; Reject Rate, On-time delivery
• KPI helps to quantify the CSF
• Generate Repeat Customers (new or repeat)
• Be most popular company (how measure popularity)
• KPI gives clear picture about what is important

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Balanced
Score Card
Approach
to
Objective
Setting

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Financial Perspective Customers Internal Business Learning & Growth
Perspective Perspective Perspective Balanced
Revenues Quality Good Productivity Indices Morale Score Card
Earnings Effective Delivery Quality Measures Knowledge
Approach
Return on Capital Customer Satisfaction Efficiency Employee Turnover
to
Cash Flow Market Share Usage of best
practices Objective
Loyalty Share of revenue
from new product
Setting
Employee
Suggestions

Strategic Department of MBA
Map shows Balanced
Cause & Score Card
Effect Approach
relation to
between Objective
perspective Setting

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Topic: Corporate Sustainability for

Presented By:
Department of MBA
• Ultimate Focus
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• SBU / SBA

Department of MBA
• Decision Making
• Control
• Performance

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• Examples of SM
• Levels of SM

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• formulation
• implementation
• evaluation and

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Definition of Sustainability
To meet the current needs without destroying the
ability of future generations to meet theirs.
1987, Brundtland Commission; Book “Our

Common Future”

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Corporate Sustainability
Challenge to simultaneously improve social and
human welfare while reducing the ecological
impact of organizations and
Ensuring effective achievement of organizational
objectives

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Definition of Corporate Sustainability
“meeting the needs of a firm’s direct and indirect
stakeholders, without compromising its ability to
meet the needs of future stakeholders as well”
indirect stakeholders (shareholders, employees, clients,

pressure groups, communities etc)

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Profit Maximization Vs Sustainability
Profit Maximization = SM
Sustainability = SSM(sustainable strategic mgmt.)

*Not only ethical but necessary for survival and growth of
their organizations

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TRIPLE Bottom Line
1998, John Elkington
People
Achieve Results for P;P;P
Planet Profit

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TRIPLE Bottom Line
People
People
Fair & Beneficial Policies
Planet Profit towards all people employees,
customers, communities

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TRIPLE Bottom Line
Planet
People
Benefit natural environment in
which we exist and includes the
Planet Profit earth, water, air, plants &
animals.
*Reducing Non-Renewable use
*Reducing Wastage
*Bear Cost of Envi. Protection

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TRIPLE Bottom Line
Profit
People
*Economic Objective of Org.
Planet Profit *After Deducting all costs incurred

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TRIPLE Bottom Line
People
Overlapping Area is
Sustainability
Planet Profit

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TRIPLE Bottom Line
Equity
Overlapping Area is
Sustainability
Envi. Economics

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Three Types of Capital
Social
Natural Economic

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Three Types of Capital
Capital
Social #Outcome of stability in society: safety & security,
educational system, affordable caring healthcare, effective
governance, fair distribution of wealth
# MUTUAL UNDERSTANDING, TRUST AND COOPERATION
#Human Capital in org.: skill, expertise, motivation, loyalty,
commitment of employees
Natural #availability of fresh air, clean water, stable climate,
renewable energy resources, sustainable eco-system
Economic #Financial, Physical, Intangible assets

https://www.investopedia.com/articles/investing/100515/three-pillars-corporate-sustainability.asp
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Topic: Stakeholders Management
Presented By:
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• Ultimate Focus
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• SBU / SBA

Department of MBA
• Decision Making
• Control
• Performance

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• Examples of SM
• Levels of SM

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• Sustainability; Corporate Sustainability
• Profit Maximization Vs Sustainability
• TRIPLE Bottom line; People, Planet, Profit
• TRIPLE Bottom line; Equity, Environment, Economics
• 3 types of capital; Social, Natural, Economic

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• formulation
• implementation
• evaluation and

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Definition of Stakeholders
A stakeholder is a person or group with an
interest in an enterprise.
“A party that has an interest in a company and can either
affect or be affected by the business”
The primary stakeholders in a typical corporation are
its investors, employees, customers, and suppliers,
communities, governments, and
trade associations.
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Internal Stakeholders
Whose interest in a company comes through a direct
relationship, such as employment, ownership, or
investment.

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External Stakeholders
Who do not directly work with a company but are
affected somehow by the actions and outcomes of
the business. Suppliers, creditors, and public groups
are all considered external stakeholders.

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STAKEHOLDERS vs. Shareholders

A shareholder has a financial interest, but a
shareholder can also sell their stock in the
company; they do not necessarily have a long-
term need for the company and can usually get
out at any time.

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Stakeholders Analysis Map
Power of Stakeholders over Strategic Decisions
Unknown Little / No Power Moderate Significant
Degree of Power Power
Effect of Unknown
Strategy on Little or No
the Effect
Stakeholder Moderate Effect
Significant Effect

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Stakeholders Engagement
The process of fostering effective relationships
with the stakeholders’
Channel
Method
Frequency
Level of Engagement

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https://www.investopedia.com/terms/s/stakeholder.asp#toc-issues-concerning-stakeholders
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Department of MBA
Topic: Corporate Governance, And

Corporate Social Responsibility
Presented By:
Department of MBA
• Ultimate Focus
Department of MBA
• SBU / SBA

Department of MBA
• Decision Making
• Control
• Performance

Department of MBA
• Examples of SM
• Levels of SM

Department of MBA
• Sustainability; Corporate Sustainability
• Profit Maximization Vs Sustainability
• TRIPLE Bottom line; People, Planet, Profit
• TRIPLE Bottom line; Equity, Environment, Economics
• 3 types of capital; Social, Natural, Economic

Department of MBA
• Definition of Stakeholder
• Internal & External Stakeholders
• Stakeholders Vs Shareholders
• Organization Stakeholders Relationship
• Stakeholders Analysis Map
• Stakeholders Engagement
• Stakeholders Mapping for Engagement Approaches

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• formulation
• implementation
• evaluation and

Department of MBA
Corporate Governance & SM
The management of the relationship between the
directors, managers and the other stakeholders of the
organization is called Corporate Governance.
* Agency Theory
* Stewardship Theory

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Agency Theory
When person delegates decision making authority to another
Principal
Agency
Relationship
Agent
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Agency Theory
In context of stakeholders management
Proposes corporate governance
mechanisms that monitor and
Owner control the managers.
Agency Agency
Problem Relationship
Manager
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Stewardship Theory
Managers are ‘stewards’ whose interests are aligned
with owners.
Proposes corporate governance mechanisms that
support and empower the managers.

Department of MBA
Corporate Governance & SM
CG relates it to
*strategic intent
*strategy formulation
*strategy implementation
*strategy evaluation

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Good Corporate Governance (As per NFCG)
• transparency of corporate structures and operations

• the accountability of managers and the boards to
shareholders
• corporate responsibility towards employees, creditors,
suppliers and local communities where the corporation
operates

Department of MBA
Corporate Social Responsibility / Corporate Citizenship
a self-regulating business model that helps a company be

socially accountable to itself, its stakeholders, and the
public.
Companies can be conscious of the kind of impact they

are having on all aspects of society, including economic,
social, and environmental

Department of MBA
Types of Corporate Social Responsibility

• Environmental Responsibility
• Ethical Responsibility
• Philanthropic Responsibility
• Financial Responsibility

Department of MBA
Benefits of Corporate Social Responsibility

• Brand Recognition
• Investor Relations
• Employee Engagement
• Risk Mitigation

https://www.investopedia.com/terms/c/corporategovernance.asp
https://www.investopedia.com/terms/c/corp-social-responsibility.asp
THANK YOU
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Strategic Management Unit-1 by Prof. Vivek V. Wankhede

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Strategic Management Unit-1 by Prof. Vivek V. Wankhede

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Department of MBA

Topic: Evolution of Strategic Mgmt.

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

• How do firms behave?

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Azhar Kazmi, 5th Edition

Topic: Understanding Strategy

• One should never blindly follow concepts of strategies{a

BY PROF. VIVEK VINAYAKRAO WANKHEDE

The Concept of Strategy

• A model can never be a true reflection of reality

• Discretion is certainly the better part of valour.

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Profit Centers or SBUs {Strategic Business Units}

• “any part of a business organization which is treated

• SBUs are involved in single line of business

BY PROF. VIVEK VINAYAKRAO WANKHEDE

SBA {Strategic Business Area}

• “a distinctive segment of the environment in which the

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Corporate Level Strategy

• overarching plan of action covering the various functions

BY PROF. VIVEK VINAYAKRAO WANKHEDE

SBU or Business Level Strategy

• comprehensive plan providing objectives for SBUs

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Functional Level Strategy

• relatively restricted plan providing objectives for a

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Operational Level Strategy

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

• Strategies at level higher than corporate-level

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Azhar Kazmi, 5th Edition

Topic: Decision Making

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

# The first considers whether the decision maker can influence

# The second addresses whether the aim is to do well or to do

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Decision research has produced good advice for routine

BY PROF. VIVEK VINAYAKRAO WANKHEDE

They require a talent for clear-eyed analysis

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Research on Decision Making is being done a lot

‘Decision’ The same term is applied to routine as well as

BY PROF. VIVEK VINAYAKRAO WANKHEDE

Strategic decision-making refers to identifying the

BY PROF. VIVEK VINAYAKRAO WANKHEDE

# The first considers whether the decision maker can influence

# The second addresses whether the aim is to do well or to do

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE

# {CONTROL} – Low or High

# {PERFROMANCE} – Absolute or Relative

BY PROF. VIVEK VINAYAKRAO WANKHEDE

BY PROF. VIVEK VINAYAKRAO WANKHEDE