Chapter 3Chapter 3By CA ANUSHRI AGRAWAL (AIR 6)anulohia.agrawal@gmail.comwww.anushriagrawal.com

• Corporate strategy is the game plan that actuallysteers the firm towards success

• Strategic planning involves a fact of interactiveand overlapping decisions leading to thedevelopment of an effective strategy for the firm

• strategic uncertainty is represented by a futuretrend or event that has inherent unpredictability

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• Corporate strategy is the game plan that actuallysteers the firm towards success

• Strategic planning involves a fact of interactiveand overlapping decisions leading to thedevelopment of an effective strategy for the firm

• strategic uncertainty is represented by a futuretrend or event that has inherent unpredictability

• Decision making is a managerial process of selectingthe best course of action out of several alternativecourses for the purpose of accomplishment of theorganizational goals.

• According to Jauch and Glueck “Strategic decisionsencompass the definition of the business, productsto be handled, markets to be served,functions to beperformed and major policies needed for theorganisation to execute these decisions to achievethe strategic objectives.

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• Decision making is a managerial process of selectingthe best course of action out of several alternativecourses for the purpose of accomplishment of theorganizational goals.

• According to Jauch and Glueck “Strategic decisionsencompass the definition of the business, productsto be handled, markets to be served,functions to beperformed and major policies needed for theorganisation to execute these decisions to achievethe strategic objectives.

Dimensions• Strategic decisions require top-management

involvement• Strategic decisions involve commitment of

organisational resources• Strategic decisions necessitate consideration of factors in

the firm’s external environment• Strategic decisions are likely to have a significant impact

on the long-term prosperity of the firm• Strategic decisions are future oriented• Strategic decisions usually have major multifunctional or

multi-business consequences

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• Strategic decisions require top-managementinvolvement

• Strategic decisions involve commitment oforganisational resources

• Strategic decisions necessitate consideration of factors inthe firm’s external environment

• Strategic decisions are likely to have a significant impacton the long-term prosperity of the firm

• Strategic decisions are future oriented• Strategic decisions usually have major multifunctional or

multi-business consequences

Strategic Intent• what they want to do” and “why they want to

do”.• It answers the question what the organization

strives or stands for?

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• what they want to do” and “why they want todo”.

• It answers the question what the organizationstrives or stands for?

MOREPRECISE

MOREBROAD

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• Vision implies the blueprint of the company’s future position• A mission statement helps to identify, ‘what business the

company undertakes.’ It defines the present capabilities,activities, customer focus and role in society. Missiondelineates the firm’s business, its goals and ways to reach thegoals

• Business definition seeks to explain the business undertakenby the firm, with respect to the customer needs, targetmarkets, and alternative technologies.

• Business model, as the name implies is a strategy for theEffective operation of the business, ascertaining sources ofincome, desired customer base, and financial details.

• Goals and objectives are the base of measurement

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• Vision implies the blueprint of the company’s future position• A mission statement helps to identify, ‘what business the

company undertakes.’ It defines the present capabilities,activities, customer focus and role in society. Missiondelineates the firm’s business, its goals and ways to reach thegoals

• Business definition seeks to explain the business undertakenby the firm, with respect to the customer needs, targetmarkets, and alternative technologies.

• Business model, as the name implies is a strategy for theEffective operation of the business, ascertaining sources ofincome, desired customer base, and financial details.

• Goals and objectives are the base of measurement

A Strategic vision is a road map of a company’s future – providing specificsabout technology and customer focus, the geographic and product markets tobe pursued, the capabilities it plans to develop, and the kind of company that

management is trying to create

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Essentials of strategic vision• think creatively about how to prepare a company

for the future.• an exercise in intelligent entrepreneurship.• creates enthusiasm among the members of the

organization.• illuminates the direction in which organization

is headed.

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• think creatively about how to prepare a companyfor the future.

• an exercise in intelligent entrepreneurship.• creates enthusiasm among the members of the

organization.• illuminates the direction in which organization

is headed.

MISSION• Who we are now• Where we want to go• Clear and exact terms

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• Who we are now• Where we want to go• Clear and exact terms

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MISSIONA company’s mission statement is typically focused on its present

business scope – “who we are and what we do”. Mission statementsbroadly describe an organizations present capabilities, customer focus,

activities, and business makeup.

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A company’s mission statement is typically focused on its presentbusiness scope – “who we are and what we do”. Mission statements

broadly describe an organizations present capabilities, customer focus,activities, and business makeup.

WHY?• To ensure unanimity of purpose within the organization.• To develop a basis, or standard, for allocating organizational

resources.• To provide a basis for motivating the use of the organization’s

resources.• To establish a general tone or organizational climate, for example,

to suggest a business like operation.• To serve as a focal point for those who can identify with the

organization’s purpose and direction.• To facilitate the translation of objective and goals into a work

structure involving the assignment of tasks to responsible elementswithin the organization.

• To specify organizational purposes and the translation of thesepurposes into goals in such a way that cost, time, and performanceparameters can be assessed and controlled.

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• To ensure unanimity of purpose within the organization.• To develop a basis, or standard, for allocating organizational

resources.• To provide a basis for motivating the use of the organization’s

resources.• To establish a general tone or organizational climate, for example,

to suggest a business like operation.• To serve as a focal point for those who can identify with the

organization’s purpose and direction.• To facilitate the translation of objective and goals into a work

structure involving the assignment of tasks to responsible elementswithin the organization.

• To specify organizational purposes and the translation of thesepurposes into goals in such a way that cost, time, and performanceparameters can be assessed and controlled.

HOW• one that typically sets it apart from other

similarly positioned companies.• A company’s business is defined by what needs

it is trying to satisfy, which customer groups it istargeting and the technologies and competenciesit uses and the activities it performs.

• unique to the organization for which they aredeveloped.

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• one that typically sets it apart from othersimilarly positioned companies.

• A company’s business is defined by what needsit is trying to satisfy, which customer groups it istargeting and the technologies and competenciesit uses and the activities it performs.

• unique to the organization for which they aredeveloped.

According to Peter Drucker, everyorganization must ask an importantquestion “What business are we in?”• What is our mission?• What is our ultimate purpose?• What do we want to become?• What kind of growth do we seek?• What business are we in?• Do we understand our business correctly and define it

accurately in its broadest connotation?• Whom do we intend to serve?• What human need do we intend to serve through our

offer?• What brings us to this particular business?• What would be the nature of this business in the future?• In what business would we like to be in, in the future?

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• What is our mission?• What is our ultimate purpose?• What do we want to become?• What kind of growth do we seek?• What business are we in?• Do we understand our business correctly and define it

accurately in its broadest connotation?• Whom do we intend to serve?• What human need do we intend to serve through our

offer?• What brings us to this particular business?• What would be the nature of this business in the future?• In what business would we like to be in, in the future?

• a) What is strategic decision making?• (b) What is strategic vision?• (c) What is a mission statement? State the points that

may be considered while writing a mission statement ofa company.

• (d) What tips can you offer to write a ‘right’ missionstatements?

• (e) How can a company deal with strategic uncertainty?• (f) You are appointed as a Strategic Manager by XYZ Co.

Ltd. Being a Strategic Manager what should be yourtasks to perform?

• (g) Briefly discuss the difference between vision andmission

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CA ANUSHRIAGRAWAL• a) What is strategic decision making?

• (b) What is strategic vision?• (c) What is a mission statement? State the points that

may be considered while writing a mission statement ofa company.

• (d) What tips can you offer to write a ‘right’ missionstatements?

• (e) How can a company deal with strategic uncertainty?• (f) You are appointed as a Strategic Manager by XYZ Co.

Ltd. Being a Strategic Manager what should be yourtasks to perform?

• (g) Briefly discuss the difference between vision andmission

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