Unit 1

Que 1 Explain the strategy and explain its scope and nature.

Ans 1 Strategy

Strategy is an action that managers take to attain one or more of the organization’s
goals. Strategy can also be defined as “A general direction set for the company
and its various components to achieve a desired state in the future. Strategy
results from the detailed strategic planning process”.

A strategy is all about integrating organizational activities and utilizing and

allocating the scarce resources within the organizational environment so as to meet
the present objectives. While planning a strategy it is essential to consider that
decisions are not taken in a vaccum and that any act taken by a firm is likely to be
met by a reaction from those affected, competitors, customers, employees or
suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events
and the need to take into consideration the likely or actual behavior of others.
Strategy is the blueprint of decisions in an organization that shows its objectives
and goals, reduces the key policies, and plans for achieving these goals, and
defines the business the company is to carry on, the type of economic and human
organization it wants to be, and the contribution it plans to make to its
shareholders, customers and society at large.

Nature of Strategy
 Based on the above definitions, we can understand the nature of strategy. A few
aspects regarding nature of strategy are as follows:

 Strategy is a major course of action through which an organization relates

itself to its environment particularly the external factors to facilitate all actions
involved in meeting the objectives of the organization.
 Strategy is the blend of internal and external factors. To meet the
opportunities and threats provided by the external factors, internal factors are
matched with them.
 Strategy is the combination of actions aimed to meet a particular condition,
to solve certain problems or to achieve a desirable end. The actions are different
for different situations.
 Due to its dependence on environmental variables, strategy may involve a
contradictory action. An organization may take contradictory actions either
simultaneously or with a gap of time. For example, a firm is engaged in closing
down of some of its business and at the same time expanding some.
 Strategy is future oriented. Strategic actions are required for new situations
which have not arisen before in the past.
 Strategy requires some systems and norms for its efficient adoption in any
organization.
 Strategy provides overall framework for guiding enterprise thinking and
action.

Features of Strategy
Strategy is Significant because it is not possible to foresee the future. Without a
perfect foresight, the firms must be ready to deal with the uncertain events which
constitute the business environment.

Strategy deals with long term developments rather than routine operations, i.e. it
deals with probability of innovations or new products, new methods of
productions, or new markets to be developed in future.

Strategy is created to take into account the probable behavior of customers and
competitors. Strategies dealing with employees will predict the employee behavior.

The Importance of Strategy

Having a clear and focused strategy is critically important to the success of your
business, and without a well-defined strategy, yours may stall or even fail.

If you can take the emotion out of your decision making process, you’ll have a
business and a team that is more focused, more productive, and more profitable.

Que 2:- What are the various processes involved in strategic managemenr?

Ans 2:- Strategic management is the process of managing, planning, and analyzing
in order to reach all organizational goals. Strategic management helps an
organization see where it currently stands, where it will be in the future staying on
the current course, and where it would like to be in the future. Strategic
management takes advantage of organizational resources to create a strategy that
helps get closer to or reach their goals.
If you look into the research on strategic management and planning, the results are
shocking. According to studies:
 95% of a typical workforce doesn’t understand its organization’s strategy
 90% of organizations fail to execute their strategies successfully
 86% of executive teams spend less than one hour per month discussing
strategy
 60% of organizations don’t link strategy to budget
Based on these statistics, we can conclude that organizations’ workforces are not
aware of their organization’s overall strategy, if the strategies being utilized are
unsuccessful, and if strategies are not being budgeted for. As an organization,
planning and strategizing for the future is one of the most beneficial initiatives you
can take.
The process of strategic management includes goal setting, analysis, strategy
formation, strategy implementation, and strategy monitoring. Let’s take a look at
how each of these steps ties into the overall strategic management process.

What is Strategic Management Process – Steps, Stages and Phases

Strategic management is all about identification and description of the strategies

that managers can carry so as to achieve better performance and a competitive
advantage for their organisation. An organisation is said to have competitive
advantage if its profitability is higher than the average profitability for all
companies in its industry.
Strategic management can also be defined as a bundle of decisions and acts which
a manager undertakes and which decides the result of the firm’s performance. The
manager must have a thorough knowledge and analysis of the general and
competitive organisational environment so as to take right decisions.
They should conduct a SWOT analysis strengths, weaknesses, Opportunities, and
Threats), i.e., they should make best possible utilization of strengths, minimize the
organisational weaknesses, make use of arising opportunities from the business
environment and shouldn’t ignore the threats.
Strategic management is nothing but planning for both predictable as well as
unfeasible contingencies. It is applicable to both small as well as large
organisations as even the smallest organisation faces competition and, by
formulating and implementing appropriate strategies, they can attain sustainable
competitive advantage.
Strategic management is a way in which strategists set the objectives and proceed
about attaining them. It deals with making and implementing decisions about
future direction of an organisation. It helps us to identify the direction in which an
organisation is moving.
Strategic management is a continuous process that evaluates and controls the
business and the industries in which an organisation is involved; evaluates its
competitors and sets goals and strategies to meet all existing and potential
competitors; and then revaluates strategies on a regular basis to determine how
these have been implemented and whether these were successful or require
replacement.
Strategic management gives a broader perspective to the employees of an
organisation and they can better understand how their job fits into the entire
organisational plan and how it is correlated to other organisational members. It is
nothing but the art of managing employees in a manner which maximizes the
ability of achieving business objectives.

Strategic management process has following five steps:

Step # 1. Mission and Goals:

The first step in the strategic management begins with senior managers evaluating
their position in relation to the organization’s current mission and goals. The
mission describes the organization’s values and aspirations; and indicates the
direction in which senior management is going. Goals are the desired ends sought
through the actual operating procedures of the organization. It typically describe
short-term measurable outcomes.
Step # 2. Environmental Scanning:
Environmental scanning refers to a process of collecting, scrutinizing and
providing information for strategic purposes and helps in analyzing the internal and
external factors influencing an organization. After executing the process,
management should evaluate it on a continuous basis and strive to improve it.
Step # 3. Strategy Formulation:
Strategy formulation is the process of deciding best course of action for achieving
organizational objectives. After conducting environment scanning process,
managers formulate corporate, business and functional strategies.
Step # 4. Strategy Implementation:
Strategy implementation implies putting the organization’s chosen strategy in to
action and making it work as intended. Strategy implementation includes designing
the organization’s structure, distributing resources, developing decision making
process, and effectively managing human resources.
Step # 5. Strategy Evaluation:
Strategy evaluation which is the final step of strategy management process
involves- appraising internal and external factors, measuring performance, and
taking remedial/corrective actions. Evaluation assure the management that the
organizational strategy as well as its implementation meets the organizational
objectives.
These steps are carried by the businesses, in chronological order, when creating a
new strategic management plan. Present businesses that have already created a
strategic management plan will revert to these steps as per the situation’s
requirement, so as to make essential changes.

Que 3:- Explain the process of strategic formulation.

Ans 3:- Strategy formulation refers to the process of choosing the most
appropriate course of action for the realization of organizational goals and
objectives and thereby achieving the organizational vision. The process of
strategy formulation basically involves six main steps. Though these steps do
not follow a rigid chronological order, however they are very rational and can be
easily followed in this order.
1. Setting Organizations’ objectives - The key component of any strategy
statement is to set the long-term objectives of the organization. It is known
that strategy is generally a medium for realization of organizational
objectives. Objectives stress the state of being there whereas Strategy
stresses upon the process of reaching there. Strategy includes both the
fixation of objectives as well the medium to be used to realize those
objectives. Thus, strategy is a wider term which believes in the manner of
deployment of resources so as to achieve the objectives.

While fixing the organizational objectives, it is essential that the factors

which influence the selection of objectives must be analyzed before the
selection of objectives. Once the objectives and the factors influencing
strategic decisions have been determined, it is easy to take strategic
decisions.

2. Evaluating the Organizational Environment - The next step is to evaluate

the general economic and industrial environment in which the organization
operates. This includes a review of the organizations competitive position. It
is essential to conduct a qualitative and quantitative review of an
organizations existing product line. The purpose of such a review is to make
sure that the factors important for competitive success in the market can be
discovered so that the management can identify their own strengths and
weaknesses as well as their competitors’ strengths and weaknesses.

After identifying its strengths and weaknesses, an organization must keep a

track of competitors’ moves and actions so as to discover probable
opportunities of threats to its market or supply sources.
 3. Setting Quantitative Targets - In this step, an organization must practically
fix the quantitative target values for some of the organizational objectives.
The idea behind this is to compare with long term customers, so as to
evaluate the contribution that might be made by various product zones or
operating departments.
4. Aiming in context with the divisional plans - In this step, the contributions
made by each department or division or product category within the
organization is identified and accordingly strategic planning is done for each
sub-unit. This requires a careful analysis of macroeconomic trends.
5. Performance Analysis - Performance analysis includes discovering and
analyzing the gap between the planned or desired performance. A critical
evaluation of the organizations past performance, present condition and the
desired future conditions must be done by the organization. This critical
evaluation identifies the degree of gap that persists between the actual reality
and the long-term aspirations of the organization. An attempt is made by the
organization to estimate its probable future condition if the current trends
persist.
6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The

best course of action is actually chosen after considering organizational

goals, organizational strengths, potential and limitations as well as the
external opportunities.

Que 4:- Write a short note on strategic management model.

Ans 4 :- The strategic management model -- or strategic planning model, as it is

also known -- is a tool used by managers to plan and implement business
strategies. Although there are variations of the strategic management model,
most are divided into six stages. Understanding these six stages will help
managers to create and implement strategies in their own firms.

Mission

The mission -- the most basic part of the strategic management model -- is a
broad focus that the firm's top management team must decide before any other
strategic planning can take place. A mission should roughly outline what a firm
wants to do and how it will do it. An example of a mission is to provide low cost
consumer goods directly to customers in the United States, Canada and Mexico.

Objectives

The firm's objectives follow from its mission. The objectives are measurable
goals for achieving the mission. Objectives might include constructing a factory,
successfully filing for a patent, raising capital or others.

Situation Analysis

The situation analysis phase of the strategic management model involves

assessing the current environment. There are a variety of frameworks for
performing this analysis, but the most commonly used is a SWOT analysis, which
measures the firm's strengths, weaknesses, opportunities and threats.

Strategy Formulation

The stage of strategy formulation takes into account the firm's objectives and the
situation analysis. Strategies are created that aim to achieve the firm's objectives
given the environmental situation.
Application

The application stage of the strategic management model involves the actual
implementation of the strategies. This is often the most difficult stage because it
requires the most extensive cooperation of all members of the organization. The
application stage can take several months or longer to complete.

Control

The control stage is the final step in the strategic management model. The
purpose of this stage is to make adaptations to the strategy after the
implementation. Often, the environment and even firm objectives will change.
This step is used to recognize this and make adjustments to the firm strategies to
adapt to these changes.

Examples:-

Balanced Scorecard:

The Balanced Scorecard is a strategic management model. Drs. Robert Kaplan and
David Norton created it in 1990. Such as:-

1. Objectives: High-level organizational aims

2. Measures: Helping to complete the objective
3. Initiatives: Action program to achieve the objective

Strategy Map:

A strategy map is another strategic management model. It is a visual tool which

design to clearly communicate a strategic plan and accomplish high-level
organizational goals. Strategy mapping is a main part of the Balanced Scorecard,
although it is one more strategic management model. And offers a brilliant way to
communicate the high-level data across of organization in a simply-edible format.

A strategy map offers a host of benefits:

 It unifies all goals into a single strategy.

 It provides an easy, simple, visual representation that is clearly referred back
to.
 While accomplishing tasks and measures, it gives every employee a clear
goal to keep in mind.
 It helps to identify your key goals.
 Strategy map helps you see how your objectives affect the others.
 It allows you to better understand which elements of your strategy need
work.
SWOT Analysis/SWOT Matrix:

A SWOT matrix is our third strategic management model. SWOT is an acronym

for strength, weakness, opportunity, and threat. Strength and weakness are
measured as the internal issues. Whereas opportunity and threat are measured as
the external issues.

Below is an example SWOT matrix from the Queensland, Australia, government:

 SOWT Analysis Model
Through a SWOT matrix helps an organization detect where they’re doing fine and
in what zones they can develop. You can read more about the Meaning of SWOT
Analysis and Steps of SWOT Analysis.

 PEST/PESTEL Model:

The PEST is an acronym for “political, economic, sociocultural, and

technological” like SWOT analysis. Each of these aspects is used to look at a
business environment, and define what could touch a health of an organization.
The PEST of strategic management model is often used in conjunction with the
external factors of a SWOT analysis.

With the PEST model adds a few extra letters as like PESTEL (or PESTLE)
considers “environmental” and “legal” factors. STEEPLED is additional variation,
which stands for “sociocultural, technological economic, environmental, political,
legal, education, and demographics.” Read more about the PEST or PESTLE
Model or PESTLED Model.

Que 5:- Explain the techniques of improving strategic decisions.

Ans 5:- Decision making is broadly random, intuitive or analytical. In

business, an analytical approach can lead to informed decisions which are
more likely to provide real business value. Which of these decision-making
techniques will enhance your own effectiveness as a manager or leader?

1. Affinity diagrams

Key use: brainstorming/mind mapping

When engaged in brainstorming ideas, how can you avoid information overload?
Affinity diagrams help leaders and teams visually organise numerous ideas and
data points in a simplified visual form.
2. Analytic hierarchy process (AHP)

Key use: complex decisions

This decision-making technique helps to mitigate any subjectivity or intuition that
goes into a decision. Going with the gut or being blinkered by a subjective
perspective is perfectly natural – it’s human nature, and in some ways is a
remarkable survival technique as it can lead to fast decisions based on personal
lived experience. However, it’s uncommon for a business issue to involve
outrunning a non-allegorical sabre-toothed tiger. Leadership often requires
decision making to be analytical and as objective as possible.

AHP, first developed in the 1970s by Dr. Thomas Saaty, combines the Multiple
Criteria decision-making technique with Paired Comparison and a splash of maths
to explore multiple criteria and options which might result in a single overall goal.
The AHP decision making technique is normally reserved for group solutions to
complex challenges.

3. Conjoint analysis

Key use: market research

Market researchers will be familiar with this stats-oriented technique. Conjoint
analysis is often used to help forecast how accepting consumers will be of
proposed changes. It’s also used to help determine a brand’s positioning in the
market. Conjoint analysis is a survey-based technique that helps reveal how
consumers might value the attributes (such as the function, features or benefits) of
a product or service.
4. Cost/benefit analysis

Key use: financial decision making

This technique is solely for making decisions of a financial nature. It can also be
used to acquire any financial data you might wish to use as part of another
decision-making technique.

5. Decision making trees

Key use: assessing multiple outcomes prior to tough decision making

The outcomes aren’t always clear when business decisions need to be made. A
business might, for example, be required to choose between conflicting strategies
while hampered by limited resources or other impediments to success. A decision-
making tree can provide a visual aid when considering the various phases of
proposed solutions with unclear outcomes.

6. Game theory

Key use: negotiating with third parties or making strategic decisions that
involve third parties
Game theory can help business leaders make decisions by putting themselves in
the shoes of a third party – e.g. a client, competitor or consumer – and anticipating
what their actions, reactions and motives might be. Playing out these scenarios in a
safe hypothetical space can help a leader make decisions based on the outcomes of
the game.
Game theory can be a useful decision-making technique if you need to take into
account exterior third parties like competitors, clients or legislative authorities. It
was invented in 1944 by John von Neumann and Oskar Morgenstern. Since then,
around 20 leading scientists and economists have been awarded the Nobel Prize in
Economic Sciences for their evolution of game theory, so it’s clearly an important
aspect of modern decision-making and analysis.

Game theory models the strategic interaction between two or more players in a
situation that involves set rules. Games are typically co-operative or non co-
operative. There are various Players, Actions, Payoffs and Information (known as
PAPI). Players formulate strategies and try to gain as much benefit as they can.

Key opportunities to use game theory in decision making:

 Bargaining and negotiating

 Product/service launch decisions
 Supply chain decisions (e.g. outsourcing)

7. Heuristic methods

Key use: save time on making decisions where a perfect result isn’t required
first time round
Heuristic methods are used to refine a product or service over time, using trial and
error. They’re not accurate, but they can get the job done. Heuristic methods often
have the benefit of saving time and resource and reducing initial expenditure.

For example, decisions relating to a website launch could be resolved using

heuristic methods, if it’s determined the website doesn’t need to be perfect on
launch. It can meet 80% of desired requirements, and be improved in terms of
content and function over time.

8. Influence diagrams approach (IDA)

Key use: reducing the risk of human error in decision making

IDA is a technique used in the field of human reliability assessment. It can be used
in all kinds of sectors, from business and HR to the healthcare and nuclear
industries.

Decision making sometimes depends greatly on the people involved and their level
of reliability. In some projects, the reliability of the team can make or break a
situation. An influence diagram can provide a visual aid to determine how human
error might influence a decision or project, and how much that might affect
outcomes.

9. Linear programming (LP)

Key use: making the most of limited resources

Linear programming uses maths to represent requirements as linear equations. It is,
for example, useful when making decisions relating to problems cropping up in
operations research.

10. Multiple criteria decision analysis

Key use: making business decisions that reach a compromise between logical
analysis and intuition
This decision-making technique allows a business to assess and evaluate various
options against a set of defined business criteria. Typical examples of criteria
might be cost/price, level of quality, customer/client satisfaction, or high returns.

This analysis technique is somewhat like a cost/benefit analysis, except it’s not
limited to cost. We make thousands of decisions every day - often intuitively, but
some part of us is weighing up the various criteria. When we buy a car, we weigh
up cost, comfort, safety, fuel economy, function, form and aesthetics. When we
buy a latte, we consider everything from cost and quality to the environmental
friendliness of the packaging.

Multiple criteria decision analysis enables leaders to weigh up different criteria.

How does one measure apples against cheese, or cost against comfort? The
following MCDA steps can help.

Multiple criteria decision analysis in 5 steps

 Specify the context

 Identify available options
 Confirm the objectives and select criteria that represent key values
 Measure each of the criteria in order to figure out their relative importance
 Calculate the different values by averaging out scores and weighting

11. Multi-voting

Key use: making fair and balanced group decisions

When making decisions as a group, use multi-voting to weed out lower priority
options. You can then use other, more exacting techniques to make key decisions
on a smaller (and therefore more manageable) group of options.
Multi-voting can be as simple as giving each member of the group a list of ideas
and telling them they can only vote for the three ideas they consider most
important or beneficial. Tally up the votes to determine which options are deemed
most important by the group.

12. Net present value (NPV) and present value (PV)

Key use: making decisions relating to investment and capital budget

The value of money flexes with time. A house bought twenty years ago might be
worth far more now, leading to questions of whether (and when) to sell or buy.
Pension payments might rise substantially the longer a person remains in
employment, leading to questions of when to retire.

Calculation of NPV or PVC can help a business compare financial options

representing future cash flows. It’s key to use critical thinking to question all
assumptions when making these calculations in order to make a genuinely
informed decision.

13. Paired comparison analysis

Key use: making decisions relating to comparing two options

 The less experienced, cheaper hire or the more expensive, more experienced
hire?
 Creating a product/service in-house or buying/outsourcing it?
 The quick, cost-effective option or the expensive, delayed, future-proofed
option?
We often have to compare two options in order of importance. Paired comparison
analysis can help with that – and we do it intuitively all the time, but it’s
advantageous in business to bring structured analysis into the mix.

If paired comparison analysis has a catch, it’s that this technique doesn’t really
surface any information identifying the criteria supporting each option. You have
to do the legwork yourself – but it’s a good starting point.

14. Pro/con technique

Key use: making decisions relating to comparing two options

The pro/con technique can be used in tandem with paired comparison analysis, and
weighing up the pros and cons of a decision is a tale as old as time.

Similar techniques include the plus/minus/interesting (PMI) technique and force

field analysis.

15. Scientific method

Key use: taking a scientific approach to business decisions

The scientific method of decision making can also be called a heuristic method,
since it’s best used in circumstances where you don’t need 100% perfection first
time round.

We all learned the drill in school – hypothesis, method, results, conclusion. There
are a few more steps to the scientific method, but in essence the format is the same
as that of science experiments in school.

Using the scientific method in 7 steps:

 Question – formulate a question

 Research – do background research to gather as much clarity as possible
 Hypothesis - Based on your research, form a hypothesis, or statement you
want to test the validity of
 Experiment – test, test, test!
 Observations – collect data from the experiment
 Results – formulate results based on the data you’ve collected
 Conclusion – determine the validity of your hypothesis

16. Trial and error

Key use: a general and popular approach to making low-risk decisions

Decision making based on trial and error sounds chaotic but it has an established
place in business strategy.

Several of the decision-making techniques outlined above have their basis in a

structured approach to trial and error. Heuristic methods and the scientific method
feature trial and error as the backbone of their process. Agile project
management is a very flexible management style that incorporates trial and error
into its process with minimum risk.
When using the trial and error method to make decisions, it’s important to
acknowledge that any failure as a result of decisions made is low risk. It’s also
vital to reflect deeply on the results in order to understand the causes of the failure
and further remove the risks and challenges on the next iteration of the trial and
error process. Going in circles is not progression. Heading upwards in a spiral is.
Que 6:- Write a short note on Mckinsey’s framework.

Ans 6:- Do you know how well your organization is positioned to achieve its
goals? Or what elements influence its ability to implement change successfully?

Models of organizational effectiveness go in and out of fashion, but the McKinsey

7-S framework has stood the test of time.

The model was developed in the late 1970s by Tom Peters and Robert
Waterman, former consultants at McKinsey & Company. They identified seven
internal elements of an organization that need to align for it to be successful.

When to Use the McKinsey 7-S Model

You can use the 7-S model in a wide variety of situations where it's useful to
examine how the various parts of your organization work together.

For example, it can help you to improve the performance of your organization, or
to determine the best way to implement a proposed strategy.

The framework can be used to examine the likely effects of future changes in the
organization, or to align departments and processes during a merger or acquisition.
You can also apply the McKinsey 7-S model to elements of a team or a project.

The Seven Elements of the McKinsey 7-S Framework

The model categorizes the seven elements as either "hard" or "soft":

The three "hard" elements are strategy, structures (such as organization charts and
reporting lines), and systems (such as formal processes and IT systems.) These are
relatively easy to identify, and management can influence them directly.

The four "soft" elements, on the other hand, can be harder to describe, less
tangible, and more influenced by your company culture. But they're just as
important as the hard elements if the organization is going to be successful.

Let's look at each of the elements individually:

 Strategy: this is your organization's plan for building and maintaining a

competitive advantage over its competitors.
 Structure: this how your company is organized (that is, how departments
and teams are structured, including who reports to whom).
 Systems: the daily activities and procedures that staff use to get the job
done.
 Shared values: these are the core values of the organization, as shown in its
corporate culture and general work ethic. They were called "superordinate
goals" when the model was first developed.
 Style: the style of leadership adopted.
 Staff: the employees and their general capabilities.
 Skills: the actual skills and competencies of the organization's employees.

You can use it to identify which elements you need to realign to improve
performance, or to maintain alignment and performance during other changes.
These changes could include restructuring, new processes, an organizational
merger, new systems, and change of leadership.
Follow these steps:

1. Start with your shared values: are they consistent with your structure,
strategy, and systems? If not, what needs to change?

2. Then look at the hard elements. How well does each one support the others?
Identify where changes need to be made.

3. Next, look at the soft elements. Do they support the desired hard elements?
Do they support one another? If not, what needs to change?

4. As you adjust and align the elements, you'll need to use an iterative (and
often time-consuming) process of making adjustments, and then re-analyzing
how that impacts other elements and their alignment. The end result of better
performance will be worth it.

Checklist Questions for the McKinsey 7-S Framework

The following questions are a starting point for exploring your situation in terms of
the 7-S framework. Use them to analyze your current (Point A) situation first, and
then repeat the exercise for your proposed situation (Point B).

Strategy:

 What is our strategy?

 How do we intend to achieve our objectives?

 How do we deal with competitive pressure?

 How are changes in customer demands dealt with?

 How is strategy adjusted for environmental issues?

Structure:

 How is the company/team divided?

 What is the hierarchy?

 How do the various departments coordinate activities?

 How do the team members organize and align themselves?

 Is decision making and controlling centralized or decentralized? Is this as it

should be, given what we're doing?

 Where are the lines of communication? Explicit and implicit?

Systems:

 What are the main systems that run the organization? Consider financial and
HR systems as well as communications and document storage.

 Where are the controls and how are they monitored and evaluated?

 What internal rules and processes does the team use to keep on track?

Shared Values:

 What are the core values?

 What is the corporate/team culture?

 How strong are the values?

 What are the fundamental values that the company/team was built on?
Style:

 How participative is the management/leadership style?

 How effective is that leadership?

 Do employees/team members tend to be competitive or cooperative?

 Are there real teams functioning within the organization or are they just
nominal groups?

Staff:

 What positions or specializations are represented within the team?

 What positions need to be filled?

 Are there gaps in required competencies?

Skills:

 What are the strongest skills represented within the company/team?

 Are there any skills gaps?

 What is the company/team known for doing well?

 Do the current employees/team members have the ability to do the job?

 How are skills monitored and assessed?

Que 7:- Write a short note on role of strategist.

Ans 7:- Role of strategists
 
Strategists are individuals or groups who are primarily involved in the formulation,
implementation, and evaluation of strategy. In a lim-ited sense, all managers are
strategists. There are persons outside the organization who are also involved in
various aspects of strategic man-agement. They too are referred to as strategists.
We can identify nine strategists who, as individuals or in groups, are concerned
with and play a role in strategic management.

1. Consultants

2. Entrepreneurs

3. Board of Directors

4. Chief Executive Officer

5. Senior management

6. Corporate planning staff

7. Strategic business unit (SBU) level executives

 8. Middle level managers

9. Executive Assistant

A brief description of how the different strategists approach the process is outlined
here.

1. Consultants: Many organizations which do not have a corporate planning

department owing to reasons like small size, infrequent require-ments, financial
constraints, and so on, take the help of external consult-ants in strategic
management. Besides the Indian consultancy firms, such as, A.F.Ferguson, S.B.
Billimoria and several others, now there are many foreign consultancy firms. They
offer a variety of services.
 
McKinsey and Company, specializes in offering consultancy in the areas of
fundamental change management and strategic visioning; Andreson Consulting, is
in business restructuring, and info tech and systems; Boston Consulting helps in
building competitive advantage; and KPMG Peat Marwick is in strategic financial
management and feasi-bility studies for strategy implementation.

2. Entrepreneurs are promoters who conceive the idea of starting a business

enterprise for getting maximum returns on their investment. They are waiting for
an environment change and thereby for an opportu-nity to exploit the situation in
their best interest. Thus they start playing their role right from the promotion of the
proposed venture. So, their strategic role to make the venture a success is very
conspicuous in a new business enterprise. Therefore, it is expected of an
entrepreneur that he should posses foresight, sense of responsibility, desire to work
hard and dashing spirit to bear any future contingencies. According to Drucker,
“the entrepreneur always searches for change, responds to it and exploits it as an
opportunity”. Here is an example of a successful women entre-preneur.

Kiran Mazumdar Shaw, a young entrepreneur, set up an export-oriented unit

manufacturing a range of enzymes. As an expert in brew-ing technology,
Mazumdur entered the field of biotechnology after ex-periencing problems in
getting a job. Later she set up another plant for manufacturing two new enzymes
created by her own research and development (R&D) department. As managing
director, Mazumdar was actively involved in all aspects of policy formulation and
implementa-tion for her companies.

3. Board of Directors are professionals elected on the Board of Di-rectors (BOD)

by the shareholders of the company as per rules and regu-lations of the Companies
Act, 1956. They are responsible for the general administration of the organization.
They are supposed to guide the top management in framing business strategies for
accomplishing predeter-mined objectives. It is also the responsibility of the Board
to review and evaluate organizational performance whether it is as per the strategy
laid down or not. The Board is also empowered to make appointments of senior
executives. In this connection, it should be noted that the success of strategies
much depends on the relative strength in terms of power held by the Board and the
Chief Executive (CE).
4. Chief Executive Officer: In the management circle, the chief ex-ecutive is the
top man, next to the directors of the Board. He occupies the most sensitive post,
being held responsible for all aspects of strategic management right from
formulation to evaluation of strategy. He is des-ignated in some companies as the
managing director, executive director or as a general manager. Whatever the
designation be, he is considered the most important strategist being responsible to
play major role in strategic decision-making.

5. Senior Management: Starting from the chief executive to the lev-el of functional
or profit-centre heads, these managers are involved in various aspects of strategic
management. Some of the members of the senior management act as directors on
the board usually on a rotational basis. All of them serve on different top-level
committees set up by the board to look after matters of strategic importance and
other policy is-sues. Executive committees, consisting of senior managers, are
respon-sible for implementing strategies and plans, and for a periodic evaluation of
performance.

Strategic planning at MRF Ltd. used senior management expertise by dividing

them into five groups dealing with products and markets, environment, technology,
resources, and manpower. Each group had a leader who helped to prepare position
papers for presentation to the board. The executive directors in the company were
actively involved in SWOT analysis through the help of managers and assistant
managers.

6. SBU level executives: “SBU” stands for strategic business unit. Under this
approach, the main business unit is divided into different independent units and is
allowed to form their own respective strategies. In fact, the business is diversified
and thus the departmental heads are supposed to act as the main strategist, keeping
an eye on optimum ben-efit for their departments. Hence strategists i.e., the
departmental heads enjoy the maximum amount of authority and responsibility
within their strategic business units.

At Shriram Fibres, the strategic planning system covered the dif-ferent businesses
ranging from nylon yarn manufacture to the provision of financial services.
Strategic plans were formulated at the level of each SBU as well as at the corporate
level. The corporate planning depart-ment at the head office coordinated the
strategic planning exercise at the SBU-level. Each SBU had its own strategic
planning cell.
 
7. Corporate-planning staff plays a supporting role in strategic management. It
assists the management in all aspects of strategy for-mulation, implementation and
evaluation. Besides this, they are respon-sible for the preparation and
communication of strategic plans, and for conducting special studies and research
pertaining to strategic manage-ment. It is important to note that the corporate
planning department is not responsible for strategic management and usually does
not initiate the process on its own. By providing administrative support, it fulfills
its functions of assisting the introduction, working, and maintenance of the
strategic management system.
 
8. Middle level managers: They are basically operational planners they may, at
best, be involved as ‘sounding boards’ for departmental plans, as implementers of
the decisions taken above, followers of policy guidelines, and passive receivers of
communication about functional strategic plans. As they are basically involved in
the implementation of functional strategies, the middle-level mangers are rarely
employed for any other purpose in strategic management.
 
9. Executive Assistant: An executive assistant is a person who as-sists the chief
executive in the performance of his duties in various ways. These could be : to
assist the chief executive in data collection and analy-sis, suggesting alternatives
where decisions are required, preparing briefs of various proposals, projects and
reports, helping in public relations and liaison functions, coordinating activities
with the internal staff and outsiders, and acting as a filter for the information
coming from differ-ent sources. Among these “the most important and what one
manager labels the “bread and butter role” of EA (executive assistant) could be that
of corporate planner”. 

Que 8:- Distinguish between ethical management and strategic management.

Que 9 :- Need and importance of ethics in strategic management.

Ans 9:- Most of us would agree that it is ethics in practice that makes sense; just
having it carefully drafted and redrafted in books may not serve the purpose. Of
course all of us want businesses to be fair, clean and beneficial to the society. For
that to happen, organizations need to abide by ethics or rule of law, engage
themselves in fair practices and competition; all of which will benefit the
consumer, the society and organization.
Primarily it is the individual, the consumer, the employee or the human social unit
of the society who benefits from ethics. In addition ethics is important because of
the following:

1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the
basic human needs. Every employee desires to be such himself and to work
for an organization that is fair and ethical in its practices.
2. Creating Credibility: An organization that is believed to be driven by
moral values is respected in the society even by those who may have no
information about the working and the businesses or an organization.
Infosys, for example is perceived as an organization for good corporate
governance and social responsibility initiatives. This perception is held far
and wide even by those who do not even know what business the
organization is into.
3. Uniting People and Leadership: An organization driven by values is
revered by its employees also. They are the common thread that brings the
employees and the decision makers on a common platform. This goes a long
way in aligning behaviors within the organization towards achievement of
one common goal or mission.
4. Improving Decision Making: A man’s destiny is the sum total of all the
decisions that he/she takes in course of his life. The same holds true for
organizations. Decisions are driven by values. For example an organization
that does not value competition will be fierce in its operations aiming to
wipe out its competitors and establish a monopoly in the market.
5. Long Term Gains: Organizations guided by ethics and values are profitable
in the long run, though in the short run they may seem to lose money. Tata
group, one of the largest business conglomerates in India was seen on the
 verge of decline at the beginning of 1990’s, which soon turned out to be
otherwise. The same company’s Tata NANO car was predicted as a failure,
and failed to do well but the same is picking up fast now.
6. Securing the Society: Often ethics succeeds law in safeguarding the society.
The law machinery is often found acting as a mute spectator, unable to save
the society and the environment. Technology, for example is growing at
such a fast pace that the by the time law comes up with a regulation we have
a newer technology with new threats replacing the older one. Lawyers and
public interest litigations may not help a great deal but ethics can.

Ethics tries to create a sense of right and wrong in the organizations and often
when the law fails, it is the ethics that may stop organizations from harming the
society or environment.

Que 10:- Mention the various levels at which strategic management can be
practiced.

Ans 10:- Strategy can be formulated at three levels, namely, the corporate level,
the business level, and the functional level. At the corporate level, strategy is
formulated for your organization as a whole. Corporate strategy deals with
decisions related to various business areas in which the firm operates and
competes. At the business unit level, strategy is formulated to convert the corporate
vision into reality. At the functional level, strategy is formulated to realize the
business unit level goals and objectives using the strengths and capabilities of your
organization. There is a clear hierarchy in levels of strategy, with corporate level
strategy at the top, business level strategy being derived from the corporate level,
and the functional level strategy being formulated out of the business level
strategy.

In a single business scenario, the corporate and business level responsibilities are
clubbed together and undertaken by a single group, that is, the top management,
whereas in a multi business scenario, there are three fully operative levels.

Levels of Strategy

Corporate Level

Corporate level strategy defines the business areas in which your firm will operate.
It deals with aligning the resource deployments across a diverse set of business
areas, related or unrelated. Strategy formulation at this level involves integrating
and managing the diverse businesses and realizing synergy at the corporate level.
The top management team is responsible for formulating the corporate strategy.
The corporate strategy reflects the path toward attaining the vision of your
organization. For example, your firm may have four distinct lines of business
operations, namely, automobiles, steel, tea, and telecom. The corporate level
strategy will outline whether the organization should compete in or withdraw from
each of these lines of businesses, and in which business unit, investments should be
increased, in line with the vision of your firm.

Business Level

Business level strategies are formulated for specific strategic business units and
relate to a distinct product-market area. It involves defining the competitive
position of a strategic business unit. The business level strategy formulation is
based upon the generic strategies of overall cost leadership, differentiation, and
focus. For example, your firm may choose overall cost leadership as a strategy to
be pursued in its steel business, differentiation in its tea business, and focus in its
automobile business. The business level strategies are decided upon by the heads
of strategic business units and their teams in light of the specific nature of the
industry in which they operate.

Functional Level

Functional level strategies relate to the different functional areas which a strategic
business unit has, such as marketing, production and operations, finance, and
human resources. These strategies are formulated by the functional heads along
with their teams and are aligned with the business level strategies. The strategies at
the functional level involve setting up short-term functional objectives, the
attainment of which will lead to the realization of the business level strategy.

For example, the marketing strategy for a tea business which is following the
differentiation strategy may translate into launching and selling a wide variety of
tea variants through company-owned retail outlets. This may result in the
distribution objective of opening 25 retail outlets in a city; and producing 15
varieties of tea may be the objective for the production department. The realization
of the functional strategies in the form of quantifiable and measurable objectives
will result in the achievement of business level strategies as well.

Summary:

1. Corporate Level Strategy:

 Defines the business areas in which your firm will operate.
  Involves integrating and managing the diverse businesses and
realizing synergy at the corporate level.
 Top management team is responsible.
2. Business Level Strategy:
 Involves defining the competitive position of a strategic business unit.
 Decided upon by the heads of strategic business units and their teams.
3. Functional Level Strategy:
 Formulated by the functional heads along with their teams.
 Involve setting up short-term functional objectives.