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STRATEGIC MANAGEMENT AND BUSINESS POLICY THIRD EDITION

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

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STRATEGIC MANAGEMENT AND BUSINESS POLICY THIRD EDITION

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  1. STRATEGIC MANAGEMENT AND BUSINESS POLICYTHIRD EDITION Chapter 1Introduction to strategic management and business policy AZHAR KAZMI

  2. 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

  3. 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 (c) Dr. Azhar Kazmi 2008

  4. Internal and External Strategic Analysis Strategy: Arenas Vehicles Differentiators Staging Economic logic Implementation Levers and Strategic Leadership Vision and Mission Goals and Objectives Hambrick and Fredrickson model of strategic management 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

  5. 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

  6. 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”. (c) Dr. Azhar Kazmi 2008

  7. 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 trade-offs 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. (c) Dr. Azhar Kazmi 2008

  8. LEVELS OF MANAGEMENT LEVELS OF STRATEGY Corporate Office CORPORATE CORPORATE-LEVEL SBU A SBU B SBU C SBU BUSINESS-LEVEL FUNCTIONAL Finance Marketing Operations HRM Information Levels at which strategy operates (c) Dr. Azhar Kazmi 2008

  9. 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. (c) Dr. Azhar Kazmi 2008

  10. 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 decision-making • Individual versus group decision-making. (c) Dr. Azhar Kazmi 2008

  11. Schools of thought on strategy formation • The prescriptive schools • The descriptive schools • The integrative school (c) Dr. Azhar Kazmi 2008

  12. Strategic management defined • Strategic management is defined as the dynamic process of formulation, implementation, evaluation and control of strategies to realise the organization’s strategic intent. (c) Dr. Azhar Kazmi 2008

  13. Formulation of strategies Implementation of strategies Strategic evaluation Establishment of strategic intent Strategic control Four phases in strategic management (c) Dr. Azhar Kazmi 2008

  14. 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 Intent Vision Mission Business definition Business model Objectives Strategic control Comprehensive model of strategic management (c) Dr. Azhar Kazmi 2008

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