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Strategic MGMT Sess 1
Strategic MGMT Sess 1
What is Strategy?
Strategic Management
C K Pralhad
What is Strategy?
Glueck :
“A stream of decisions and actions which leads to the
development of an effective strategy or strategies to help
achieve corporate objectives”.
Hofer :
”The process which deals with the fundamental organizational
renewal and growth with the development of strategies ,
structures and systems necessary to achieve such renewal
and growth and with the organizational systems needed to
effectively manage the strategy formulation and
implementation processes.”
Strategic Management
Ansoff :
“A systematic approach to a major and increasingly important
responsibility of general management to position and relate the
firm to its environment in a way that will assure its continued
success and make it secure from surprises.”
Sharplin :
“The formulation and implementation of plans and carrying out
of activities relating to the matters which are of vital , pervasive
or continuing importance to the total organization”
Harrison :
“The process through which organizations analyze and learn
from their internal and external environments, establish
strategic direction create strategies that are intended to help
achieve established goals and execute these strategies , all in
an effort to satisfy key organizational stakeholders.”
Mintzberg's 5 Ps for Strategy
Mintzberg's 5 Ps for Strategy
The word "strategy" has been used implicitly in different ways
even if it has traditionally been defined in only one. Explicit
recognition of multiple definitions can help people to
manoeuvre through this difficult field. Mintzberg provides five
definitions of strategy:
1.Plan
2.Ploy
3.Pattern
4.Position
5.Perspective.
1. Plan
Strategy is a plan - some sort of consciously intended course
of action, a guideline (or set of guidelines) to deal with a
situation. By this definition strategies have two essential
characteristics: they are made in advance of the actions to
which they apply, and they are developed consciously and
purposefully.
2. Ploy
As plan, a strategy can be a ploy too, really just a specific
manoeuvre intended to outwit an opponent or competitor.
3. Pattern
If strategies can be intended (whether as general plans or
specific ploys), they can also be realised. In other words,
defining strategy as plan is not sufficient; we also need a
definition that encompasses the resulting behaviour: Strategy
is a pattern - specifically, a pattern in a stream of actions.
Strategy is consistency in behaviour, whether or not intended.
The definitions of strategy as plan and pattern can be quite
independent of one another: plans may go unrealised, while
patterns may appear without preconception.
Plans are intended strategy, whereas patterns are realised
strategy; from this we can distinguish deliberate strategies,
where intentions that existed previously were realised, and
emergent strategies where patterns developed in the
absence of intentions, or despite them.
4. Position
Strategy is a position - specifically a means of locating an
organisation in an "environment". By this definition strategy
becomes the mediating force, or "match", between
organisation and environment, that is, between the internal and
the external context.
5. Perspective
Strategy is a perspective - its content consisting not just of a
chosen position, but of an ingrained way of perceiving the
world. Strategy in this respect is to the organisation what
personality is to the individual. What is of key importance is
that strategy is a perspective shared by members of an
organisation, through their intentions and / or by their actions.
In effect, when we talk of strategy in this context, we are
entering the realm of the collective mind - individuals united by
common thinking and / or behaviour.
What is Business?
What is Business?
Money = C + P
What is Organisational Structure?
IT
Internal External
Micro Macro
PESTEL
•Political
Competitors
External Stakeholders •Economical
•Shareholders •Social
•Customers •Technological
•Suppliers
•Government
•Environmental
•Society •Legal
Business Environment
Internal External
Micro Macro
PESTEL
•Political
Competitors
External Stakeholders •Economical
•Shareholders •Social
•Customers •Technological
•Suppliers
•Government
•Environmental
•Society •Legal
Strategic Mgmt
Business Environment
1. Internal Environment
Org. Structure ( I P O)
Input = Resources = 5M (Money, Manpower, Material,
Machine, Management)
Process = Predictable, Repeatable, Measurable
Output = Q P S S (Quality, Price, Service, Speed)
Major Functions
Production, Marketing, Finance, H R
R & D, I T, Business Development
Internal Stakeholder
Employees
Strategic Mgmt
International Business Environment
2. External Environment
a. External Micro Environment
External Stakeholders
(Shareholders, Customers, Suppliers,
Govt.,Society)
and
Competitors
for
Developing Countries
• Employment
• Entrepreneurship
• Employability
• Education
Business Excellence
• by Azhar Kazmi
• by Adhikari
• by Kesho Prasad
• by Michael Porter
Effectiveness
Achieving the Corporate Objectives
Efficiency
Achieving Objectives with least Resources
Innovation
Improving the Present with New, Different and Better (NDB)
Managing Change
Quick Adaptations
What is Strategy?
Strategy can be defined as the determination of the basic long
term goals and objectives of an enterprise, and the adoption of
courses of action and the allocation of resources necessary for
carrying out these goals. Decisions to expand the volume of
activities, to set up distant plants and offices, to move into new
economic functions, or to become diversified along many lines
of business involve the defining of new basic goals. New
courses of action must be devised and resources allocated and
reallocated in order to achieve these goals and to maintain and
expand the firm’s activities in the new areas in response to
shifting demands, changing sources of supply, fluctuating
economic conditions, new technological developments, and the
actions of competitors.