Amity Business School

Amity Business School

MBA(M&S) Class of 2011, Semester III
Strategic Management
Dr. Himani Sharma

1
 What is Strategic Amity Business School

Management
Strategic Management entails three ongoing processes:
1.Analysis:
- Analysis of strategic goals and the external
and internal environments
2.Decisions:
- What industries to compete?
- How should we compete?
3.Actions:
- Actions to implement decisions
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Strategic Management
Strategic management consists of the
analyses, decisions, and actions an
organization undertakes in order to
create and sustain competitive
advantages.
 What is Strategy? Amity Business School

“A unified, comprehensive, and integrated plan designed to

ensure that the basic objectives of the enterprise are achieved.”
(Glueck, 1980:9)

“The pattern or plan that integrates an organization’s major goals,

policies, and action sequences into a cohesive whole.” (Quinn,
1980)

“A pattern of resource allocation that enables firms to maintain or

improve their performance.

“A good strategy… neutralizes threats and exploits opportunities

while capitalizing on strengths and avoiding or fixing weaknesses.”
(Barney,
1997:17)
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Four Key Attributes of Strategic

Management
• Directs the organization toward overall goals
and objectives
• Includes multiple stakeholders in decision
making
•Needs to incorporate short-term and long-term
perspectives
•Recognize trade-offs between efficiency and
effectiveness
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Common
Common Elements
Elements in
in Successful
Successful Strategy
Strategy
Successful
Strategy

EFFECTIVE IMPLEMENTATION

Long-term, Profound Objective

simple and understanding of appraisal of
agreed the competitive resources
objectives environment
 Amity Business School

• Strategy consists of competitive moves and business

approaches used by managers to run the company
• Strategy involves making analysis and choices
• The hows that define a firm's strategy
– How to grow the business
– How to please customers
– How to outcompete rivals
– How to manage each functional piece of the business (R&D,
production, marketing, HR, finance, and so on)
– How to respond to changing market conditions
– How to achieve targeted levels of performance
 Thinking Strategically
Amity Business School
Three Big Central
Questions
1. What’s the company’s present situation?

- industry conditions and competitive pressure

- current performance and market standing

- resource strength and capabilities and competitive weaknesses

2. Where does the company need to go from here?

– Business(es) to be in and market positions to stake out
– Buyer needs and groups to serve
– Direction to head

3. How should it get there?

– A company’s answer to “how
will we get there? ” is its strategy
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Strategy as an Emergent Process

• Strategy making in an unpredictable world
– Creates the necessity for flexible strategic approaches.
• Strategy making by lower-level managers
– Strategy evolves through autonomous action.
• Serendipity and strategy
– Accidental discoveries and happenstances can have
dramatic effects on strategic direction.
• Intended and emergent strategies
– Realized strategies are combinations of intended and
emergent strategies.
 Amity Business School

Intended and Emergent Strategies

Source: Reprinted from “Strategy Formation in an Adhocracy,”

by Henry Mintzberg and Alexandra McGugh, published in
Administrative Science Quarterly, Vol. 30, No. 2, June 1985, by
permission of Administrative Science Quarterly.
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The Strategic Management Process for

Intended and Emergent Strategies
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Strategy
Strategy Making
Making :: Design
Design or
or Process?
Process?
Strategy as Design Strategy as Process
Planning and Many decision makers
rational choice responding to multitude of
external and internal forces

INTENDED EMERGENT
STRATEGY STRATEGY

REALIZED STRATEGY
Mintzberg’s
Mintzberg’sCritique
Critiqueof ofFormal
FormalStrategic
StrategicPlanning:
Planning:
•The
•Thefallacy
fallacyof
of prediction
prediction––the
thefuture
futureisisunknown
unknown
•The
•The fallacy of detachment -- impossibleto
fallacy of detachment -- impossible todivorce
divorceformulation
formulationfrom
from
implementation
implementation
•The
•Thefallacy
fallacyof
offormalization
formalization--inhibits
--inhibitsflexibility,
flexibility,spontaneity,
spontaneity,
intuition and learning.
intuition and learning.
 Amity Business School

Strategy
Strategy Making
Making Processes
Processes within
within the
the
Company:
Company: Multiple
Multiple Roles
Roles of
of Strategy
Strategy
Strategy as Decision Improves the quality
Support of decision making

Strategy as Coordination Creates consistency

and Communication and unity

Improves perform-
Strategy as Target ance by setting
high aspirations
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Strategic Problem-Solving Model

Managing Leadership
•Team
•Vision
•Client
•Inspiration
•Self
•Delegation

Business Need
•Competitive Implementation
•Organizational •Dedication
•Financial Problem Intuition Solution •Reaction
•Operational •Completion
•Iteration
Data

Analyzing Presenting
•Framing •Structure
•Designing •Buy-in
•Gathering
•Interpreting
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Strategic Planning in Practice

• Planning under uncertainty
– Scenario planning for dynamic environmental change
• Ivory tower planning
– Lack of contact with operational realities
– The importance of involving operating managers
– Procedural justice in the decision-making process
• Engagement, explanation, and expectations
• Strategic Intent: Planning for the present
– Recognition of the static nature of the strategic fit
model
– Strategic intent in focusing the organization on winning
by achieving stretch goals
 Amity Business School

The
The Evolution
Evolution of
of Strategic
Strategic Management
Management
1950s 1960s-early 70s Mid-70s-mid-80s Late 80s –1990s 2000s

DOMINANT Budgetary Corporate Positioning Competitive Strategic

THEME planning & planning advantage innovation
control

Financial Planning Selecting Focusing on Reconciling

MAIN
ISSUES control growth &- sectors/markets. sources of size with
diversification Positioning for competitive flexibility &
leadership advantage agility

KEY Capital Forecasting. Industry analysis Resources & Cooperative

CONCEPTS budgeting. Corporate Segmentation capabilities. strategy.
& Financial planning. Experience curve Shareholder Complexity.
TOOLS planning Synergy Portfolio analysis value. Owning
E-commerce. standards.
— Knowledge Management—

Coordination Corporate Diversification. Restructuring. Alliances &

MANAGE-
& control by planning depts. Global strategies. Reengineering. networks
MENT
IMPLIC- Budgeting created. Rise of Matrix structures Refocusing. Self -organiz
ATIONS systems corporate Outsourcing. ation
& virtual
 Basic Model of Amity Business School

Strategic Management

Four Basic Elements

Feedback
 Strategic management
process Amity Business School

Strategy formulation – Strategy implementation –

creating strategies putting strategies into action

Identifying Analyse external Revise Implement Evaluate

and analyse and internal mission and strategies: results:
current: environments: objectives • Corporate • Strategic
• Mission • Industry and & select governance control
• Objective external new • Manage- • Renew
• Strategies environment strategies: ment systems strategic
(opportunities and • Corporate and practices management
threats) • Business • Strategic process
• Organisational • Functional leadership
resources and
capabilities
(strengths and
weaknesses)
 Strategic management model
Amity Business School

External
Audit

Generate, Implement
Implement
Evaluate, Strategies:
Long-Term Strategies: Measure &
Vision Select Mgmt Issues
& Objectives Marketing, Evaluate
Strategies Fin/Acct, Performance
Mission
R&D, CIS

Internal
Audit
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The
The Basic
Basic Framework
Framework
Strategy:
Strategy: the
the Link
Link between
between the
the
Firm
Firm and
and its
its Environment
Environment
THE FIRM
THE
Goals & INDUSTRY
Values
ENVIRONMENT
STRATEGY
Resources &
Capabilities Competitors
Customers
Structure & Suppliers
Systems
 A Framework for Analyzing
Amity Business School

Organizations

ExternalAnalysis
External Analysis Internal
Internal Analysis
Analysis

Strategy
Strategy

People
People Structure
Structure

Systems
Systems Culture
Culture

Performance
Performance
Figure 16.1