BENEFITS & PROCESS

Dr. Rajan Chaudhary

Apeejay Institute of Management & Engineering Technical Campus

 BENEFITS OF STRATEGIC MGT.

1. It reduces uncertainty: Planning forces managers to look

ahead, anticipate change and develop appropriate responses.
It also encourages managers to consider the risks associated
with alternative responses or options.

2. It provides a link between long and short terms: Planning

establishes a means of coordination between strategic
objectives and the operational activities that support the
objectives.

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 cont...

3. It facilitates control: By setting out the organisation’s

overall strategic objectives and ensuring that these are
replicated at operational level, planning helps departments
to move in the same direction towards the same set of goals.

4. It facilitates measurement: By setting out objectives and

standards, planning provides a basis for measuring actual
performance.

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 Strategic management has thus both financial and non-
financial benefits:
 1. Financial Benefits: Research indicates that
organisations that engage in strategic management are
more profitable and successful than those that do not.
Businesses that followed strategic management concepts
have shown significant improvements in sales, profitability
as compared to firms without systematic planning
activities.

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cont..

 Non-financial benefits: Besides financial benefits, strategic

management offers other intangible benefits to a firm. They are;
 (a) Enhanced awareness of external threats
 (b) Improved understanding of competitors’ strategies
 (c) Reduced resistance to change
 (d) Enhanced problem-prevention capabilities of organisation
 (e) Increased interaction among managers at all divisional and
functional levels
 (f) Increased order and discipline.

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 Strategic Management Process

 Developing an organisational strategy involves four main

elements – strategic analysis, strategic choice, strategy
implementation and strategy evaluation and control.
 Strategic Analysis: The foundation of strategy is a
definition of organisational purpose. This defines the
business of an organisation and what type of organisation
it wants to be. Many organisations develop broad
statements of purpose, in the form of vision and mission
statements. These form the spring – boards for the
development of more specific objectives and the choice of
strategies to achieve them.

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cont...

Environmental analysis – assessing both the external and

internal environments is the next step in the strategy process.
Managers need to assess the opportunities and threats of the
external environment in the light of the organisation’s
strengths and weaknesses keeping in view the expectations of
the stakeholders. This analysis allows the organisation to set
more specific goals or objectives which might specify where
people are expected to focus their efforts. With a more
specific set of objectives in hand, managers can then plan
how to achieve them.

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 cont...


Strategic Choice: The analysis stage provides the basis for
strategic choice. It allows managers to consider what the
organisation could do given the mission, environment and
capabilities – a choice which also reflects the values of
managers and other stakeholders. (Dobson et al. 2004).
These choices are about the overall scope and direction of
the business. Since managers usually face several strategic
options, they often need to analyze these in terms of their
feasibility, suitability and acceptability before finally
deciding on their direction

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 cont...


Strategy Implementation: Implementation depends on
ensuring that the organisation has a suitable structure, the
right resources and competencies (skills, finance,
technology etc.), right leadership and culture.

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 cont...

 Strategy Evaluation and Control: Organisations set up

appropriate monitoring and control systems, develop
standards and targets to judge performance.

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Apeejay Institute of Management Technical Campus

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THANK YOU ALL