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Unit-2 Strategic Management

STRATEGIC MANAGEMENT

Objectives

The objective of this lecture is to discuss:

The evolution, need, scope and development of strategic management.

The roles of strategists and types of strategies.

The limitations of strategic management.

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LECTURE OUTLINE

Introduction

Strategic Management

Role of Strategists in Decision Making

Types of Strategies

Limitations of Strategic Management

Summary

Check Your Learning

Activity

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INTRODUCTION

Strategic management is a systematic procedure of analysing, planning

and implementing strategies in an organisation to gain continued success.

Importance of strategic management:

To cope with changing business environment in an organisation.

To formulate business activities which provide financial performance.

To gain competitive advantages.

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STRATEGIC MANAGEMENT

During 1930s and 1940s, the increasing changes in business environmentemphasised the evolution of strategic management for integration of various

functional areas.

The advances in technology and increased boundaries in business has paved way

for development of strategic management.

Need and scope - Strategic management helps in making crucial decisions and

allows a systematic approach for business operations.

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STRATEGIC MANAGEMENT CONTD

The Key features of strategic management are:

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ROLE OF STRATEGISTS IN DECISION MAKING

The role of strategists involve thinking, planning and implementing

relevant strategies to gain long term goal in the organisation.

Strategists are present at various management levels in an organisation:

Top level management

Board of directors

Planning staff

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TYPES OF STRATEGIES

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TYPES OF STRATEGIES CONTD

Corporate level It consists of board of directors and CEO in framing strategies.

The strategies are influential, pioneering and futuristic in nature.

The strategies in corporate level are:

Stability and expansion strategy

Retrenchment strategy

Corporate restructure

Concept of synergy (Combination strategy)

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Business level It deals with formulating the objectives and allocating appropriate

resources to various functional areas in the organisation.

The main features of business strategies are:

Business stakeholders

Achieving Cost Leadership and differentiation

Risk factors

External risk

Internal risk

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Tactical of Functional level It consists of strategies specific to functional areas

and decisions at functional level are tactical.

The two types of functional level strategies are:

o Procuring and managing

o Monitoring and directing

Operational level It refers to the implementation of strategic decisions and

translation of strategic decisions into strategic actions at corporate level.

The main aspects of operational level are:

oAchieving cost and operational efficiency

o Optimal utilisation of resources

o Productivity

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Strategic management is a long term process and the implementation of strategies

requires necessary changes in the organisation.

The limitations are:

Resistance to change

Dissatisfaction of employeesTime consuming

Concentrates in achieving goal and guidelines

Non practical planning

Political pressure

Ignorance of other managerial functions

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Limitations of Strategic Management

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Strategic management process deals with executing planned strategies in an

organised manner.

Strategic management evolution relies upon the long term planning in the

organisation to achieve an overall progress.

Strategists take up responsibilities at various management levels. The limitations of

strategic management occurs due to various issues regarding the

implementation of strategies.

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Summary

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CHECK YOUR LEARNING

1. Define strategic management process.

ANS: Strategic management is the process of analysing, planning, formulating,

implementing, evaluating and maintaining strategies in the organisation.

2. List the different types of strategies?

ANS: Corporate level

Business levelTactical of functional level

Operational level

3. What is strategic analysis?

ANS: Strategic analysis is the process of analysing the position of organisation

and plan strategies based on the analysis.

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ACTIVITY

Referhttp://www.projectsparadise.com/strategic-approach-airtel/ and identify the

strategic approaches and strategic planning methods adopted by Bharti Airtel to

form an effective organisation.

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