Strategic Management

■ It is defined as the set of decisions and

actions that result in the formulation
and implementation of plans designed
to achieve a company’s objective. It
comprises of nine critical tasks.
Strategic Management
■ Budget
■ Long range planning
■ Strategic Plan
■ Strategic Market Management
■ Strategic Management
Simple model of Strategic
Management Process
■ Envn Scanning
■ Strategy Formulation
■ Strategy Implementation
■ Strategy Evaluation
9 Critical Tasks
1. Formulate the company’s mission
2. Conduct an analysis that reflects the company’s
internal conditions and capabilities
3. Assess the company’s external environment
4. Analyze the company’s options by matching its
resources with the external environment
5. Identify the most desirable options
6. Select a set of long-term objectives
7. Develop annual objectives and short term strategies
8. Implement the strategic choices
9. Evaluate the success of the strategic process as an
input for future decision making
Business – Context
 Strategic Management Model
Company’s mission
& social responsibility

External Environment
Remote Possible? Internal
Industry Analysis
Operating Desired?

Strategic analysis and choice

Generic and grand stra
Feedback

Feedback
Long-term objectives

Short-term objectives; Policies that

Functional tactics
reward system empower action

Restructuring, reengineering &

Legend refocusing the organization
Major impact
Strategic control
Minor Impact & continuous improvement
Social Responsibility
■ Freidman s Traditional View
■ Carolls –Eco , legal
 Mission

• A company’s mission is designed to accomplish

seven outcomes:
– to ensure unanimity of purpose within the
organization.
– to provide a basis for motivating the use of the
organization’s resources.
– to develop a basis, or standard, for allocating
organization’s resources.
– to establish a general tone or organizational climate;
for example, to suggest a businesslike operation.

more…
 Mission…

– to serve as a focal point for those who can identify with

the organization’s purpose and direction and to deter
who cannot do so from participating further in its
activities.
– to facilitate the translation of objectives and goals into
a work structure involving the assignment of tasks to
responsible elements within the organization.
– to specify organizational purposes and the translation
of these purposes into goals in such a way that cost,
time and performance parameters can be assessed and
controlled.
 3 Components of a
Mission Statement

• Company Goals:
– The three economic goals that guide the strategic
direction of almost every business - survival, growth &
profitability.
• Company Philosophy:
– Often called the creed, it reflects or specifies the basic
beliefs, values, aspirations and philosophical priorities
to which strategic decision makers are committed.
• Company Self-Concept:
– A major determinant of a firm’s success is the extent to
which the firm can relate functionally to its external
environment.
 Vision
• Richard Lynch defines vision as “ a challenging
and imaginative picture of the future role and
objectives of an organisation, significantly
going beyond its current environment and
competitive position.”
 Corporate Governance
• The set of mechanisms that are used to
govern managers and ensure that the actions
they take are consistent with the interests of
key stakeholder groups
 objectives of corporate governance

• To ensure that strategic decisions are made

effectively
• To establish order when there is a conflict of
interest (between owners and top
management)
• To reflect and enforce the company’s mission
and values
 Kinds of Directors
• Inside
• Outside
• Affliated
• Co determination
• Direct interlocking Directors
• Indirect interlocking Directors