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Strategic management

Strategic management. Tarak Bahadur K.C., PhD Basant Raj Sigdel. Session Outline. Strategy - concept Strategic thinking Strategic planning process. Strategy. Exercise.

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Strategic management

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  1. Strategic management • Tarak Bahadur K.C., PhD • Basant Raj Sigdel

  2. Session Outline • Strategy - concept • Strategic thinking • Strategic planning process

  3. Strategy

  4. Exercise • What comes to your mind while talking about Strategy? Please create a PICTURE/DIAGRAM within 5 minutes that expresses the term- ‘Strategy’. (You may use words or phrase as supplement) • Each participant will get 1 minute for drawing • Succeeding officers may build on the concept already drawn • You are requested not to communicate while drawing • Circulate your drawing to other groups • Share learning in plenary in 5 minutes

  5. Strategy • - is an action oriented plan of operation for achieving desired goals based on situation analysis, and emphasises what an organisation will be doing in future. • - is the answer to the question “How”? • Strategies are simply a set of actions that enable an organisation to achieve results. • - is a plan / tactics / scheme one adopts to get something done under conditions of uncertainty. • - is a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.

  6. Plan 5 Ps of Strategy – H Mintzberg Perspective Strategy Ploy Pattern Position

  7. Strategy … • PLAN • Consciously intended course of action, a set of guidelines to deal with the situation • PLOY • Specific maneuver intended to outwit an opponent or competitor • PATTERN • In a stream of actions…consistency in behavior whether or not intended • POSITION • Means of locating an organization in an environment • PERSPECTIVE • An engrained way of perceiving the world

  8. Strategy • Managerial Intent • Logical incremental • Rational command • Cultural / Political Process

  9. 1. Strategy: A Managerial Intent • Logical incremental • Standardized planning procedures • Systematic data collection and analysis • Constant environmental scanning • On going adjustment of strategy • Tentative commitment to strategy • Step by step small scale change

  10. Strategy: A …. • Rational command • Senior managers determines and direct strategy • Strong vision or mission • Definite and precise objectives • Analysis and evaluation of environments • Clear plans

  11. 2. Strategy: A Cultural/Political Process • Muddling through • Managing conflicting interest groups • Powerful groups with control over critical resources more likely to influence strategy • Standardized way of doing things • Routines and procedures embedded in organizational strategy • Deeply rooted beliefs and assumptions • Strong resistance to change • Gradual adjustment to strategy

  12. Strategy: A …. • Externally dependent • Strategy is imposed by external forces (e.g. legislation, parent organization) • Freedom of choice severely restricted • Groups dealing with the environment have greater influence over strategy • Political activity within organization and between environment likely • Externally driven strategy - Johnson & Scholes

  13. Strategic Thinking

  14. Self Assessment • Assess your strategic thinking abilities • Time 10 minutes

  15. ScoringUse the following table to interpret your score.

  16. Strategic Thinking

  17. Strategic Management • … is the application of strategic thinking to the job of leading an organisation. • “Managing strategically”, in other words: • ‘Diagnosing situation strategically’, and • ‘Applying knowledge strategically’ • “… is continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment.” • Certo and Peter

  18. Strategic Planning Strategic Planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organisation is, what it does, and why it does it with a focus on the future (JM Bryson). It focuses on the best ‘fit’ between an organisation and its environment. It is defined as the process of addressing the following questions: The resulting document is Strategic Plan for performance improvement to achieve desired goals. A living document that has ability to create successful future of the organization.

  19. Strategic Planning VMO SWOT Strategy The resulting document is Strategic Plan for performance improvement to achieve desired goals. A living document that has ability to create successful future of the organization.

  20. Strategic … • Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. • The resulting document is Strategic Plan for performance improvement to achieve desired goals. It is a living document that has ability to create successful future of the organization.

  21. Strategic Planning Process It is an ongoing process and involving a series of steps to be followed. • Getting Ready(Agreement) • Environmental Scanning (SWOT Analysis) • Strategy Formulation (Identification of Strategic Issues, Vision,Mission, Objectives, Roles, Strategies) • Strategy Implementation (Strategic Actions (Action Plan): Actions/Activities, By whom, By when, Resources, Indicators, Critical factors) • Evaluation and Control

  22. 1. Getting Ready (Agreement) • Assessing readiness • Commitment of leadership • Ability of leaders to devote necessary attention to the ‘big picture’ • The purpose is to develop initial agreement among key internal decision makers about overall planning process for their support and commitment

  23. Steps to Prepare for Planning • Obtain a formal commitmentto conduct planning • Select a strategic planning committee of no more than five to seven people, a combination of visionaries and "actionaries,” • Develop a work plan or a plan to plan that outlines who is responsible for each outcome and time frames • Consider the adequate level of resources(money and time) required to conduct an appropriate planning process • Identify the information that must be collected to help make sound decisions

  24. 2. Environment Analysis • Analysis and diagnosis of an organization, often referred to as an Organization Audit or SWOT analysis. • It is undertaken to assess an organisation’s ability to deal with its environment by identifying strengths, weaknesses, opportunities and threats (SWOT).

  25. SWOT

  26. Internal EnvironmentOrganisation / Supply side analysis An analysis of internal organizational factors which reviews and investigates the prevailing resources, processes and performance of organization. The analysis identifies major strengths and weaknesses - of all the key functional elements(Structure, Functions, HR, Finance, IT, Rules, Procedures, etc.). What are major internal Strengths and Weaknessesin terms of Structure, Resources, Processes, Performance, Culture, etc. ?

  27. External EnvironmentDemand side analysis Covers the various stakeholders outside the organization. The analysis indicates the opportunities and threats faced by the organisation from its relationship with external stakeholders. Major categories of external environment: 1. Forces and trends – PEST 2. Clients, customers, or payers 3. Actual or potential competitors or collaborators What major external Opportunities and Threats (Political, Economic, Social, Technology, Legal, Stakeholders, etc.)do the organisation has?

  28. Benefits of SWOT Analysis • Produces information vital to the organisation’s survival and prosperity • Allow seeing the organization as whole in relation to its environment • Clarify for the organization the nature of the ‘tension fields’ within which it exists • Timely actions may be taken to deal with threats and weaknesses

  29. Considerations • Use precise, verifiable statements ("Cost advantage of Rs……/unit in sourcing resources x", rather than "Good value for money")- be specific. • Reduce long lists of factors, and prioritizethem, so that you spend your time thinking about the most significant factors.

  30. Sources of Information and Methods of Information Collection Sources of Information • Primary • Secondary Methods of Information Collection • Interview • Focus group discussion / Workshop • Questionnaire Survey • Observation • Reviewing available materials

  31. SWOT Profile

  32. SWOT Profile- an example

  33. Exercise: SWOT Analysis

  34. Army Command and Staff College • Army Hospital • Welfare Fund • Logistics Management • Disaster Risk Management

  35. 3. Strategy Formulation: Identifying Strategic Issues Strategic Issues • Fundamental policy questions or critical challenges that affect • An organization’s mandates, mission and values • Organization/management • Costs, financing • Services • Consumers, users…. About which something can be done. John M. Bryson, Strategic Planning for Public and Nonprofit Organizations:  A Guide to Strengthening and Sustaining Organizational Achievement, rev. ed. (San Francisco:  Jossey-Bass, 1995), 30

  36. Strategic Issues Example • How to provide adequate health service to the needy people? Prioritizing Issues • No action is needed at present, but needs monitoring • Can be handled as regular planning • Urgent, must be dealt with • Actionable/feasible, Resources, Stakeholder readiness, Importance

  37. Vision, Mission, Objectives, Roles Vision: • …is a mental picture of a possible situation or state of affairs. • …a statement about what your organization wants to become. How the organisation would like the world in which it operates to be? What it should look like? Where it wants to go in future? Example: “All Nepali having adequate basic health service at their doorstep.”

  38. Mission - the fundamental purpose of an organisation, basically describing why it exists (reasons for existence – purpose) and what it does to achieve its Vision. Why it should be doing what it does? Example: “Promoting basic health service in the country involving CBOs related to health service and providing technical support to them for their institutional capacity development.”

  39. Objectives What you are trying to achieve by a particular course of action. Stated in terms of the results it needs/wants to achieve in future. Objectives should relate to the expectations and requirements of all the major stakeholders. They should be SMART. Example: • Implement government policies and plans related to health service • Provide technical support to CBOs • Carry out basic health related studies and research

  40. Roles - the position that an organisation has in a particular situation, which determines how much it is involved in the situation or how much responsibility it has. Roles are identified considering strategic strengths and opportunities. Example: • Policy advice • Implementation of policies • Research • HRD

  41. Strategy Formulation Strategy is an action oriented plan of operation for achieving desired goals based on situation analysis, and emphasises what an organisation will be doing in future. An effective strategy must meet several criteria: • Technically workable • Politically acceptable to key stakeholders • Accord with the organisation’s philosophy and values. • Ethical, moral and legal, • Deal with issues it was supposed to address

  42. Considerations in Formulating Strategies • Organisational competence and resources to capture opportunities • Environmental threats to its long-term well being • Personal values and aspirations of managers • Societal obligations and ethical considerations • Organisational culture

  43. Strategic Options: TWOS Matrix-Weihrich

  44. Strategy … Example of Strategy: • Establishing and strengthening CBOs related to health service • Fostering institutional networking and coordination The Choice of Strategy depends upon organisation’s environment and mission and objectives.

  45. Strategic Plan

  46. 4. Strategy Implementation • However beautiful the strategy, you should occasionally look at the results. - Winston Churchill For effective implementation, it needs to be translated into more detailed policies that can be understood at the functional level of the organization.

  47. A General Framework for Strategy Implementation • Building an organisation structure to the requirements of the strategy • Allocating resources and energies on accomplishment of the strategic goals • Ensuring organisation-wide commitment • Installing administrative support system • Shaping the organisation culture to fit the strategy • Exerting strategic leadership

  48. Basic Approaches to Strategy Implementation • Commander Approach • Organisational Change Approach • Collaborative Approach • Cultural Approach • Crescive Approach

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