NATURE AND SCOPE OF STRATEGIC MANAGEMENT

1. NATURE AND SCOPE OF
STRATEGIC MANAGEMENT
PRESENTED BY:
RAKESH KR NAYAK
MPMIR III SEM
2019-2020
PRESENTED TO:
DR. SANDEEP KUMAR

2. Meaning of Strategy.
● A plan of action designed to achieve a long-term or overall aim.
●A good strategy provides a clear roadmap, consisting of a set of
guiding principles or rules, that defines the actions people in the
business should take (and not take) and the things they should
prioritize (and not prioritize) to achieve desired goals.

3. What is Strategic Management?
Strategic Management can be defined as the “art and
science” of formulating , implementing, evaluating cross
functional decision that enables an organization to achieve
its objective.

4. Important concepts of Strategic Management.
1. SWOT Analysis
SWOT framework was initially used by Harvard and later popularized by Kenneth R.
Andrews and it still remains a commonly practiced analysis tool.
SWOT Analysis should be conducted, i.e., identify Strengths, Weaknesses, Opportunities,
and Threats for your organization and accordingly utilize strengths in the best manner,
work over the organizational weaknesses, grab the upcoming opportunities and make a
backup plan for identified threats

5. Contd.
2. Experience curve
Experience Curve is that the more experience a business has in
producing a particular product, the lower its costs.

6. Other’s are:
Environmental Scanning, BCG matrix, Competitor Analysis, Porter’s
Five model, Strategic Leadership, Strategy Formulation and
Implementation, Corporate Governance, Business Ethics, Core
Competencies etc.

7. Key Themes
J. Constable has defined the area addressed by strategic management as "the
management processes and decisions which determine the long-term structure and
activities of the organization". This definition incorporates five key themes:
● Management process. Management process as relate to how strategies are
created and changed.
● Management decisions. The decisions must relate clearly to a solution of
perceived problems (how to avoid a threat; how to capitalize on an opportunity).

8. ● Structure of the organization. An organization is managed by people within a
structure. The decisions which result from the way that managers work together
within the structure can result in strategic change.
● Activities of the organization. This is a potentially limitless area of study and we
normally shall centre upon all activities which affect the organization.
● Time scales. The strategic time horizon is long. However, it for company in real
trouble can be very short.

9. Nature of Strategic Management
●Generic
●Emergent
●Timely Changes
●Proactive Process
●Long Term Planning
●Integrated Planning

10. Nature and Scope of Strategic Management
It comprises nine critical tasks:
(1). Formulate the company’s mission, including broad statements about its purpose, philosophy,
and goals.
(2). Conduct an analysis that reflects the company’s internal conditions and capabilities.
(3). Assess the company’s external environment including both the competitive and the general
contextual factors.
(4). Analyze the company’s options by matching its resources with the external environment.

11. (5). Identify the most desirable options by evaluating each option in light of the company’s
mission.
(6). Select a set of long-term objectives and grand strategies that will achieve the most
desirable options.
(7). Develop annual objectives and short-term strategies that are compatible with the selected
set of long-term objectives and grand strategies.
(8). Implement the strategy choices by means of budgeting resource allocations in which the
matching of tasks, people, structures, technologies, and reward systems is emphasized.
(9). Evaluate the success of the strategic process as an input for future decision making.

12. Levels of Strategy
3 Levels can be identified
- The decision-making hierarchy of a firm typically contains three levels.
- At the top is the corporate level
Composed principally of a board of directors and the chief executive and administrative
officers.
- Here the emphasis is on stockholders interests and the society at large.
- They determine what business a firm should be involved.
- They also set objectives and formulate that span the activities and functional areas of the
business.

13. Contd.
- In the middle of the decision-making hierarchy is
the business level.
Composed principally of business and corporate managers
-
These managers must translate the statements of direction and intent generated at the corporate
level into concrete objectives and strategies for individual business divisions or SBUs.

14. - At the bottom of the decision-making hierarchy is the
functional level
- Composed principally of managers of product, geographic and functional
areas
- They develop annual objectives and short-term strategies in such areas as
production, operations research and development, procurement, finance
and accounting, marketing, and human resources.

15. Benefits of Strategic Management
● Enhance the firm’s ability to prevent problems
● Group-based strategic decisions are likely to be drawn from the best
available alternatives
- The strategic management process results
in better decisions because group
interaction generates a greater variety of
strategies.
● Gaps and overlaps in activities among individuals and groups are reduced
as participation in strategy formulation clarifies differences in roles.
● Resistance to change is reduced