Introduction To Strategic Management and Business Policy

STRATEGIC MANAGEMENT AND BUSINESS POLICY
THIRD EDITION
Chapter 1 Introduction to strategic management and business policy

AZHAR KAZMI
Learning objectives
Describe the historical development of strategic management and business policy in the world and in India Discuss the likely future developments in the field of strategic management and business policy Explain the concept of strategy and its limitations Describe the process of strategic decision making Discuss the various schools of thought on strategy formation Describe the strategic management process
(c) Dr. Azhar Kazmi 2008
Evolution of strategic management and business policy

The genesis of strategic management and business policy Evolution based on management practices Historical perspective Pointers to the future
Hambrick and Fredrickson model of strategic management

Internal and External Strategic Analysis
Strategy:
Vision and Mission Goals and Objectives Arenas Vehicles Differentiators Staging Economic logic Implementation Levers and Strategic Leadership
D. C. Hambrick & J. W. Fredrickson: Are you sure you have a strategy? (2001). Academy of Management Executive Vol. 15, No. 4, pp. 48-59 (c) Dr. Azhar Kazmi 2008 4
The Indian scenario

Role of IIMs and ASCI Role of AICTE Role of AIMS Role of AIMA India-focused international studies Strategic Management Forum of India Publications
(c) Dr. Azhar Kazmi 2008 5
Business policy defined

Business policy, as defined by Christensen and others, is "the study of the function and responsibilities of senior management, the crucial problems that affect success in the total enterprise, and the decisions that determine the direction of the organisation and shape its future. The problems of policy in business, like those of policy in public affairs, have to do with the choice of purposes, the moulding of organisational identity and character, the continuous definition of what needs to be done, and the mobilisation of resources for the attainment of goals in the face of competition or adverse circumstance.
The concept of strategy

A strategy could be:
plan or course of action or a set of decision rules making a pattern or creating a common thread; the pattern or common thread related to the organisation's activities which are derived from the policies, objectives and goals; related to pursuing those activities which move an organisation from its current position to a desired future state; concerned with the resources necessary for implementing a plan or following a course of action; and connected to the strategic positioning of a firm, making tradeoffs between its different activities, and creating a fit among these activities. the planned or actual coordination of the firm's major goals and actions, in time and space that continuously co-align the firm with its environment.
Levels at which strategy operates

LEVELS OF MANAGEMENT LEVELS OF STRATEGY
CORPORATE
Corporate Office
CORPORATE-LEVEL
SBU
SBU A
SBU B
SBU C
BUSINESS-LEVEL
FUNCTIONAL
Finance
Marketing
Operations
HRM
Information
Strategic decision-making
Objectives to be achieved are determined; Alternative ways of achieving the objectives are identified; Each alternative is evaluated in terms of its objective-achieving ability; and The best alternative is chosen.
Issues in strategic decision-making

Criteria for decision-making Rationality in decision-making Creativity in decision-making Variability in decision-making Person-related factors in decisionmaking Individual versus group decisionmaking.
(c) Dr. Azhar Kazmi 2008 10
Schools of thought on strategy formation

The prescriptive schools The descriptive schools The integrative school
11
Strategic management defined

Strategic management is defined as the dynamic process of formulation, implementation, evaluation and control of strategies to realise the organizations strategic intent.
12
Four phases in strategic management
Establishment of strategic intent
Formulation of strategies
Implementation of strategies
Strategic evaluation
Strategic control
13
Comprehensive model of strategic management

Strategic Intent
Vision Mission Business definition Business model Objectives
Strategy Formulation
Environmental Organisational Appraisal Appraisal SWOT Analysis Corporate-level Strategies Business-level Strategies Strategic analysis and choice Strategic plan
Strategy Implementation
Project Procedural Resource allocation Structural Behavioural Functional & Operational
Strategic Evaluation
Strategic control
14

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STRATEGIC MANAGEMENT AND BUSINESS POLICY

Chapter 1 Introduction to strategic management and business policy

(c) Dr. Azhar Kazmi 2008

Evolution of strategic management and business policy

(c) Dr. Azhar Kazmi 2008

Hambrick and Fredrickson model of strategic management

The Indian scenario

Business policy defined

(c) Dr. Azhar Kazmi 2008

The concept of strategy

(c) Dr. Azhar Kazmi 2008

Levels at which strategy operates

(c) Dr. Azhar Kazmi 2008

(c) Dr. Azhar Kazmi 2008

Issues in strategic decision-making

Schools of thought on strategy formation

(c) Dr. Azhar Kazmi 2008

Strategic management defined

(c) Dr. Azhar Kazmi 2008

Four phases in strategic management

Establishment of strategic intent

(c) Dr. Azhar Kazmi 2008

Comprehensive model of strategic management

(c) Dr. Azhar Kazmi 2008

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