STRATEGIC MANAGEMENT

STRATEGY
A strategy is defined as, a unified, comprehensive and integrated plan that relates to the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization.

Therefore a strategy may be analyzed as follows: Strategy is a central understanding of the strategic management process Strategy is the determination of basic long term goals and objectives of an organization. It is determining the courses of action to attain predetermined goals and objectives. It means allocating the necessary resources for implementing the courses of action. It develops the company from the current position to the desired future position. It sets a clear direction for the company. The company knows its strengths and weaknesses compared with its competitors. The company can devote its resources to projects that employ its core competencies.

Kinds of strategies

Planned strategies precise intentions re formulated and articulated by a central leadership and backed up by formal controls to ensure their implementation without any surprise. Entrepreneurial strategy intentions exist as the personal, unarticulated visions of a single leader and so are adaptable to new opportunities. Ideological strategy Intentions exist as the collective vision of all the members of the organization, controlled through strong and shared norms. Umbrella strategy - A leadership in partial control of organizational action defines strategic targets or boundaries within which others must act. Flexibility is given to maneuver.

Process strategy the leadership controls the process aspects of the strategy, leaving the actual content of the strategy to others. They decide, who gets hired, what structures they are required to work within etc. Disconnected strategy Members or units that are loosely connected to the rest of the organization produce patterns of action in the absence of a central intention. Consensus strategy Through mutual adjustment, various members converge on patterns that pervade the organization in the absence of a central intention. Imposed strategy The external environment dictates patterns in actions, either directly or indirectly.

STRATEGIC MANAGEMENT The evolution of the concept of strategic management can be traced to the concept of long range planning during post WW II. The earliest long range planning principally consisted of forecasting trends in sales, profits, and capital requirements of the business done on an annual basis. Thus, in the 1950s long range planning was primarily concerned with goal setting and it did not provide for the implementation of the plans. In the 1960s the concept of economic planning was incorporated in long-range planning and the management placed emphasis on the allocation of resources while formulating long-range plans for the enterprise. These long range plans were more inward looking than being based on the forces in the external environment, as a result of which, many firms received severe setbacks in their operations.

Therefore in the 1970s strategic planning came to be identified as the process of determining the major objectives of an organization and the policies and strategies governing the operation, use and disposition of resources to achieve these objectives. The thrust of strategic planning approach was on environmental scanning where choice of objectives and strategy is based on opportunities and threats arising out of changes in the environmental forces. Later, strategic management came to be understood as the systematic, long term planning that positions a firm within its external environment. It is concerned with achieving an overall integration of an organizations internal division while simultaneously integrating the organization with its external environment.