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Semester 2: Strategic Management
Introduction: Strategy Strategic Management Process Developing a Strategic Vision Mission- Setting Objectives Strategies and Tactics Importance of Corporate Strategy the 7-S Framework- Corporate Governance Board of Directors Role and Functions Board Functioning Top Management Role and Skills.
Strategic Management
Introduction to Strategy
Strategy is a plan of action designed to achieve a long-term or overall aim. It encompasses the analysis of competitive environments and organizational capabilities.
Strategic Management Process
The strategic management process involves a series of steps that organizations follow to develop and implement strategies effectively. It includes environmental scanning, strategy formulation, strategy implementation, and evaluation.
Developing a Strategic Vision and Mission
A strategic vision outlines what an organization aspires to achieve in the long term. A mission statement conveys the organization's core purpose and values, guiding decision-making.
Setting Objectives
Objectives are specific measurable goals that an organization aims to achieve within a set timeframe. They provide direction and focus for strategy implementation.
Strategies and Tactics
Strategies are broad approaches to achieving objectives, while tactics are specific actions taken to execute strategies. The two work together to fulfill organizational goals.
Importance of Corporate Strategy
Corporate strategy is vital as it sets the direction for an organization, ensuring resources are allocated effectively and aligning operations with overall goals.
The 7-S Framework
The 7-S Framework includes seven interdependent elements: strategy, structure, systems, shared values, skills, style, and staff. It is used to analyze and align organizations for effective management.
Corporate Governance
Corporate governance refers to the systems and processes that direct and control an organization. It encompasses the relationships among stakeholders, including the board, management, and shareholders.
Board of Directors - Role and Functions
The board of directors is responsible for overseeing management, making strategic decisions, and ensuring accountability. They play a critical role in governance and organizational success.
Board Functioning
Effective board functioning requires clear roles, open communication, and a collaborative approach to decision-making. Regular evaluations can enhance board performance.
Top Management - Role and Skills
Top management is responsible for overall strategy and direction. Key skills include leadership, strategic thinking, and effective communication, ensuring alignment across the organization.
Corporate Policy and Planning in India Importance Characteristics Objectives - Policy Formulation and Development Types of Business Policies- Implementation of Policies. Society and Business Social Responsibility of Business Corporate Governance and Ethical Responsibility.
Corporate Policy and Planning in India
Corporate policy and planning play a vital role in guiding organizations towards achieving their strategic objectives. They ensure alignment between external environment demands and internal capabilities, foster decision-making consistency, and enhance organizational effectiveness.
Key characteristics of corporate policies include clarity, flexibility, coherence, comprehensiveness, and practicality. Policies should be easily understood, adaptable to changing circumstances, and should align with the organization's overall vision and mission.
The main objectives of corporate policy and planning include resource optimization, risk management, strategic decision-making, fostering innovation, and ensuring sustainable growth. These objectives guide organizations in navigating challenges and capitalizing on opportunities.
Policy formulation involves identifying key issues, gathering relevant information, engaging stakeholders, and defining clear, actionable policies. Development includes a detailed plan for implementation and monitoring of these policies to ensure effectiveness.
Business policies can be categorized into several types, including operational policies, financial policies, human resource policies, marketing policies, and environmental policies. Each type addresses different functional areas within an organization.
Successful implementation of policies requires effective communication, training, and involving stakeholders. Continuous evaluation and feedback mechanisms are essential to assess policy performance and make necessary adjustments.
Businesses operate within a societal context, necessitating an understanding of societal needs and expectations. Corporate policies should align with societal values to maintain a positive public image and build trust.
Corporate social responsibility emphasizes ethical practices and the importance of businesses contributing positively to society. This includes considering environmental sustainability, ethical labor practices, and community engagement.
Corporate governance involves a set of rules and practices that control and direct a company. It emphasizes transparency, accountability, and fairness in dealing with stakeholders and is essential for maintaining trust and integrity.
Ethical responsibility involves adhering to high moral standards in business operations. Organizations must integrate ethical principles into their strategies and policies, addressing issues like corruption, discrimination, and environmental impact.
Environmental Analysis Environmental Scanning Industry Analysis - The Synthesis of External Factors - Internal Scanning Value Chain Analysis SWOT Audit Scenario planning- Creating an Industry Matrix.
Environmental Analysis and Scanning in Strategic Management
Environmental Analysis
Environmental analysis involves assessing the external conditions that can impact an organization. It includes considering economic, social, technological, ecological, and political factors. Organizations must stay informed about these factors to adapt and strategize effectively.
Environmental Scanning
Environmental scanning refers to the process of gathering, analyzing, and processing information from the external environment to identify trends and changes. This helps organizations anticipate challenges and opportunities in their industry.
Industry Analysis
Industry analysis focuses on understanding the dynamics of the industry in which an organization operates. This includes examining competitors, market trends, and consumer behavior to identify strategic opportunities and threats.
Synthesis of External Factors
The synthesis of external factors involves integrating insights gained from environmental analysis and scanning to create a comprehensive overview of the operating landscape. This helps in strategic planning and decision-making.
Internal Scanning
Internal scanning assesses an organization's internal environment. This includes examining resources, capabilities, and processes to understand strengths and weaknesses in comparison to external factors.
Value Chain Analysis
Value chain analysis looks at the different activities within an organization that add value to its products or services. By understanding the value chain, organizations can identify areas for improvement and competitive advantage.
SWOT Audit
A SWOT audit evaluates an organization's strengths, weaknesses, opportunities, and threats. This framework helps in strategic formulation and prioritizing initiatives based on internal and external assessments.
Scenario Planning
Scenario planning involves creating detailed accounts of potential future developments based on trends and uncertainties. This helps organizations prepare flexible strategies to navigate future challenges.
Creating an Industry Matrix
An industry matrix is a tool that visually represents the competitive environment and market positioning of various organizations within an industry. This helps in identifying market gaps and opportunities for strategic action.
Strategy Formulation and Analysis Strategy Formulation Strategic Factors Analysis Summary Matrix SFAS Portfolio Analysis Business Strategy- TOWS Matrix Corporate Strategy Functional Strategy Strategic Choice Generic, Competitive Strategies ETOP, TOWS
Strategy Formulation and Analysis
Introduction to Strategy Formulation
Strategy formulation involves the process of defining an organization's strategy or direction and making decisions on allocating resources to pursue this strategy. It is crucial for aligning the goals and objectives of the organization with the competitive environment.
Strategic Factors Analysis Summary (SFAS)
The SFAS matrix is a tool used to identify and analyze the internal and external factors that influence an organization's strategy. It combines the strengths, weaknesses, opportunities, and threats (SWOT) analysis for developing strategic options.
Portfolio Analysis
Portfolio analysis is a method used to evaluate the strategic position of a business's brand portfolio. It helps businesses identify which products or business units to invest in, divest, or develop based on their market attractiveness and competitive strengths.
Business Strategy - TOWS Matrix
The TOWS matrix is an extension of the SWOT analysis, focusing on the interaction between external opportunities/threats and internal strengths/weaknesses to develop strategic options tailored to improving the organization's competitive position.
Corporate Strategy
Corporate strategy refers to the overall scope and direction of a corporation and how value will be added to the different parts of the business. It often deals with decisions related to mergers, acquisitions, and resource allocation across business units.
Functional Strategy
Functional strategy ensures that the skills and resources of different departments align with broader corporate goals. It involves planning within the limits of the firm's resources and external market forces.
Strategic Choice
Strategic choice involves selecting the most appropriate course of action from several alternatives based on the organization's goals, resources, and external environment. It aims to establish competitive advantages.
Generic Competitive Strategies
Generic competitive strategies include cost leadership, differentiation, and focus strategies that firms use to gain a competitive edge and achieve superior performance.
ETOP Analysis
Environmental Threats and Opportunities Profile (ETOP) is a tool used to identify and analyze external environmental factors that may impact an organization's strategy. It helps in understanding market dynamics and external pressures.
Conclusion
Effective strategy formulation and analysis require a systematic approach to understanding both internal and external factors influencing the organization. Employing various analytical tools aids in making informed strategic decisions.
Strategy Implementation Strategy Implementation - Corporate Culture Matching Organisation Structure to Strategy Mergers and Acquisitions and Diversifications Strategic Leadership Problems in Measurement of Performance- Strategy Audit-Strategic Control Process Du Ponts Control Model Balanced Score Card Michael Porters Framework for Strategic Management Future of Strategic Management Strategic Information System.
Strategy Implementation
Corporate Culture
Corporate culture encompasses the shared values, beliefs, and behaviors within an organization that influence how work gets done. A strong alignment between culture and strategy can enhance employee engagement and drive performance.
Matching Organisation Structure to Strategy
The organization structure should effectively support the strategic objectives of the company. A clear structure defines roles, responsibilities, and communication channels, facilitating better strategy execution.
Mergers and Acquisitions
Mergers and acquisitions can serve as a strategy for growth and diversification. The implementation phase requires careful integration of cultures, systems, and processes to ensure long-term success.
Diversifications
Diversification strategies involve entering new markets or sectors to minimize risk and expand the revenue base. Effective implementation requires market research, resource allocation, and performance monitoring.
Strategic Leadership
Strategic leadership is crucial for guiding an organization through the complexities of strategy implementation. Leaders must communicate a clear vision and inspire teams to work towards strategic goals.
Problems in Measurement of Performance
Measuring performance accurately can be challenging due to the use of various metrics and indicators. It is essential to align performance measurement with strategic objectives to assess effectiveness.
Strategy Audit
A strategy audit assesses the effectiveness and relevance of the current strategy by examining internal and external environments. It helps identify necessary adjustments to improve strategic alignment.
Strategic Control Process
The strategic control process involves monitoring and evaluating the execution of strategy to ensure alignment with objectives. It provides feedback for continuous improvement.
Du Ponts Control Model
The Du Pont Control Model is a framework for analyzing profitability by examining the relationships between sales, expenses, and asset efficiency. It helps organizations focus on key performance drivers.
Balanced Scorecard
The Balanced Scorecard is a strategic management tool that translates an organization's vision and strategy into measurable objectives across four perspectives: financial, customer, internal processes, and learning and growth.
Michael Porters Framework for Strategic Management
Porter's framework emphasizes competitive advantage through cost leadership, differentiation, and focus strategies. Understanding these forces aids in positioning the organization in the market.
Future of Strategic Management
The future of strategic management may involve increased reliance on data analytics, technology, and agility to adapt to rapidly changing business environments.
Strategic Information System
A strategic information system supports organizational goals by providing accurate and timely information. It enhances decision-making processes and overall strategy implementation.
