S .M UNIT 1_1437577104899.docx - Strategic Management Unit-1 Basic Concept of Strategic Management The concept of strategy is central to understanding

S .M UNIT 1_1437577104899.docx - Strategic Management...

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Strategic Management Unit-1 Basic Concept of Strategic Management. The concept of strategy is central to understanding the process of strategic management. The term ‘strategy’ is derived from a Greek word ‘ strategos’, which means generalship- the actual direction of military force. Strategic management is a set of managerial decisions and actions that determines the long run performance of a corporation and it is continuous task. It includes environmental scanning –both external and internal and strategy formulation, strategy implementation and evaluation and control. So, it starts with environmental analysis then moves to strategic control. Its Purpose for matches its ever changing environment. Therefore, it emphasizes the monitoring and evaluating of external opportunities and threat in light of corporation’s strengths and weaknesses. It originally called Business policy. Strategic Management Definition – “The set of managerial decisions and actions that result in the formulation, implantation and control of plans designed to achieve a company’s objectives” Nine critical task of Strategic Management: - 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 4. Analyse the company’s options by matching its resources with the external environment 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 compatible with the objectives and grand strategies 8. Implement the strategic choice by means of budgeted resources allocations 9 Evaluation -the success of the strategic process is-as an input for the future decision making. Need for Strategic Management 1. Due to Change: - Strategic management encourages the top executives to forecast change and provides direction and control. The firm may pro-act to the change rather than just react to it. It also allows the firm to take advantage of the opportunities provided by the changes in the environment and avoid threats or reduce the risk 2. To provide guidelines: - Strategic management provide guidelines to the employee about the organization’s expectations from them. This would- minimize conflict between job performance and job demands.
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3.Developed field of study by Research: - Recently there are methodological problem researches in this field of study. More systematic knowledge in this area is available at present.
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