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STRATEGIC MANAGEMENT Edited by Dr /DCOM506 Edited by: Dr. Anand Thakur STRATEGIC MANAGEMENT Edited By Dr. Anand Thakur Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for Lovely Professional University Phagwara SYLLABUS Objectives: Development and reinforcement of a general management point of view-the capacity to view the firm from an overall perspective, in the context of its environment. Development of an understanding of fundamental concepts in strategic management: the role of the general manager, the levels and components of strategy, competitive analysis, and organizational evolution. Development of those skills and knowledge peculiar to general management and the general manager's job that have not been covered in previous functional courses. Synthesis of the knowledge gained in previous courses and understand- ing what part of that knowledge is useful to general managers. DCOM506 Strategic Management Sr. No. Description 1. Nature of Strategic Management, Dimensions, benefits and risks. The strategic management process. 2. Strategy formulation. Business vision and mission, Importance, Characteristics and components. Evaluating mission statements. 3. The External Assessment, Porters five force analysis. Industry and competitive analysis. The Global Environment, competitive strategies for firms in global markets. 4. The Internal Assessment: SWOT Analysis, strategy and culture. Value Chain Analysis. Resource based view of the firm. Benchmarking. 5. Strategies in Action: The balanced scorecard, types of strategies, Integrative, Intensive, Diversification strategies, defensive strategies, Porters Generic Strategies. 6. Strategy analysis and choice: Business level strategies. Cost leadership, Differentiation, Speed and market focus. Multi business strategy: BCG matrix, GE Nine Cell matrix. Limitations of portfolio approaches. The Parenting framework. 7. Strategy Implementation: Short term objectives, functional tactics. Empowering Operating personnel, Allocation of recourses, managing resource conflict. 8. Structure and strategy: Improving effectiveness of traditional organisational structures. Creating Agile Virtual Organisations, Modular organisation. Towards boundary less structures. 9. Leadership and culture: Strategic intent, Shaping organisational culture. Role of leader in organisational culture. 10. Strategy evaluation: Strategy evaluation process. DMGT502 Strategic Management Sr. No. Description 1 Nature of Strategic Management: Dimensions, benefits and risks, the strategic management process. Establishment of Strategic Intent: Business vision and mission, importance, characteristics and Components, evaluating mission statement, concept of goals and objectives. 2 The Environment Appraisal: External assessment, concept of environment, porters five force analysis, industry and competitive analysis, environmental scanning. 3 Organizational Appraisal: the Internal Assessment: SWOT analysis, strategy and culture, value chain analysis, organizational capability factors, Benchmarking. 4 Corporate Level Strategies: Concentration, integration, diversification, expansion strategies, retrenchment and combination strategies, internationalization, cooperation and restructuring. 5 Business Level Strategies: Industry structure, positioning of firm, generic strategies, business tactics, Internationalization. 6 Strategy Analysis and Choice: Process for strategic choice, strategic analysis, SWOT, industry analysis, corporate portfolio analysis, contingency strategies. 7 Strategic Implementation: Activating strategies, nature, barrier and model for strategy implementation, resource allocation. 8 Structural Implementation: Types of organizational structures, organizational design and change, structures for strategies. Behavioural Implementation: stakeholders and strategy, stakeholder’s management, strategic leadership, corporate culture and strategic management, personal values and ethics, social responsibility and strategic management. 9 Functional and Operational Implementation: Functional strategies, functional plans and policies, operational plans and policies, personnel plans and strategies. 10 Strategic Evaluation and Control: Nature of strategic evaluation and control, strategic control, operational control, techniques for strategic control, role of organizational systems in evaluation. CONTENT Unit 1: Introduction to Strategic Management 1 Ginni Nijhawan, Lovely Professional University Unit 2: Strategy Formulation and Defining Vision 16 Hitesh Jhanji, Lovely Professional University Unit 3: Defining Mission, Goals and Objectives 32 Ginni Nijhawan, Lovely Professional University Unit 4: External Assessment 48 Hitesh Jhanji, Lovely Professional University Unit 5: Organisational Appraisal: The Internal Assessment 76 Hitesh Jhanji, Lovely Professional University Unit 6: Organisational Appraisal: Internal Assessment 91 Hitesh Jhanji, Lovely Professional University Unit 7: Corporate Level Strategies 111 Hitesh Jhanji, Lovely Professional University Unit 8; Business Level Strategies 139 Pavitar Parkash Singh, Lovely Professional University Unit 9: Strategic Analysis and Choice 157 Pavitar Parkash Singh, Lovely Professional University Unit 10: Strategy Implementation 182 Pavitar Parkash Singh, Lovely Professional Universityy Unit 11: Structural Implementation 199 Pavitar Parkash Singh, Lovely Professional University Unit 12: Behavioural Implementation 217 Anand Thakur, Lovely Professional University Unit 13: Functional and Operational Implementation 236 Anand Thakur, Lovely Professional University Unit 14: Strategic Evaluation and Control 251 Anand Thakur, Lovely Professional University Ginni Nijhawan, Lovely Professional University Unit 1: Introduction to Strategic Management Unit 1: Introduction to Strategic Management Notes CONTENTS Objectives Introduction 1.1 Definition of Strategic Management 1.2 Nature of Strategic Management 1.3 Dimensions of Strategic Management 1.4 Need for Strategic Management 1.5 Benefits of Strategic Management 1.6 Risks involved in Strategic Management 1.7 Strategic Management Process 1.8 Summary 1.9 Keywords 1.10 Self Assessment 1.11 Review Questions 1.12 Further Readings Objectives After studying this unit, you will be able to: State the meaning, nature and importance of strategic management Explain the dimensions and benefits of strategic management Identify the risks involved in strategic management Discuss the strategic management process Introduction Strategic Management is exciting and challenging. It makes fundamental decisions about the future direction of a firm – its purpose, its resources and how it interacts with the environment in which it operates. Every aspect of the organisation plays a role in strategy – its people, its finances, its production methods, its customers and so on. Strategic Management can be described as the identification of the purpose of the organisation and the plans and actions to achieve that purpose. It is that set of managerial decisions and actions that determine the long-term performance of a business enterprise. It involves formulating and implementing strategies that will help in aligning the organisation and its environment to achieve organisational goals. Strategic management does not replace the traditional management LOVELY PROFESSIONAL UNIVERSITY 1 Strategic Management Notes activities such as planning, organising, leading or controlling. Rather, it integrates them into a broader context taking into account the external environment and internal capabilities and the organisation’s overall purpose and direction. Thus, strategic management involves those management processes in organisations through which future impact of change is determined and current decisions are taken to reach a desired future. In short, strategic management is about envisioning the future and realizing it. 1.1 Definition of Strategic Management We have so far discussed the concepts of strategic thinking, strategic decision-making and strategic approach which, it is hoped, will serve as an a background understand the nature of strategic management. However, to get an understanding of what goes on in strategic management, it is useful to begin with definitions of strategic management. Later in the unit, we introduce the elements and the process of strategic management and the importance, benefits and limitations of strategic management. As already mentioned, the concepts in strategic management have been developed by a number of authors like Alfred Chandler, Kenneth Andrews, Igor Ansoff, William Glueck, Henry Mintzberg, Michael E. Porter, Peter Drucker and a host of others. There are therefore several definitions of strategic management. Some of the important definitions are: 1. “Strategic management is concerned with the determination of the basic long-term goals and the objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals”. – Alfred Chandler, 1962 2. “Strategic management is a stream of decisions and actions which lead to the development of an effective strategy or strategies to help achieve corporate objectives”. – Glueck and Jauch, 1984 3. “Strategic management is a process of formulating, implementing and evaluating cross-functional decisions that enable an organisation to achieve its objective”. – Fed R David, 1997 4. “Strategic management is the set of decisions and actions resulting in the formulation and implementation of plans designed to achieve a company’s objectives.” – Pearce and Robinson,
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