• In 1911, Harvard Business School introduced course of Business policy in

management studies to generate general management capabilities.

• It was based on case study primarily and part of the course which was
introduced in 1908 by the same.
• Formal introduction of course started in 1969 when regulatory body of
business in US made the course compulsory for the recognition of
institutes
William F Glueck
• The business policy became famous because manager started using
planning and they used policies in the same
• Going forward manager started doing future prediction but the
contemporary techniques like capital budgeting and MBO are not
competent to do the same and it has been replaced by long term planning
• It eventually became strategic planning and later by strategic management
• Strategic management is a process of formulation, implementation and
control
• Christensen defined it as
– The study of function and responsibility of senior
management, the crucial problem that affect success
in total enterprise, and the decision that determine
the direction of organization and shape its future.
• it emphasis on rational analytical approach
• Provides strategic framework for whole
organization
• It’s a framework by which general management
activities can be handled in effective way
Concept of Strategic Management
• Strategy + Management
• Two point of view of management
1. Management (Senior management people)
– Key Group of organization who are responsible for its affairs
– Chief organ to manage a business
– Managing business means integrating all resources like
manpower, money, material, technology which are unorganized
in a organized way to create productive and purposeful entity
– Organization became proper synchronized system when
management utilizes its resources effectively and efficiently
– Success depends largely on character and skill of its
management
– Introduction of change
2. Management (Function and process point of view)
– Set of interrelated functions and processes carried out by
the management of organization to attain its objective
– Function means basic management functions – Planning,
Organizing, directing, staffing, controlling
– Organization’s function or sub processes are wide range
and they are interrelated with each other.
– Its wide range as starts from organization objective
decision, acquisition of resources, allocation of the same,
and installing control system to ensure implementation
as per plan
• Management is an influence process to make
things happen, to gain command over
phenomena, to induce and direct people in a
particular manner.
• Influence comes from power, knowledge
resources, competence
• Management decides about goal, plan activity,
allocate resources and control according to
change in environment to reach goal efficiently
and effectively
 Concept of Strategy
• Came from war – Dictionary definition
• Business also need to deal with external and
internal forces while pursuing their mission and
objective
• It helps to reduce complexity in business and
reduce uncertainty causes by change in
environment
• Strategy, is a game plan the management of
business uses to take market position, conduct its
operation, attract and satisfy customers, compete
successfully and achieving organization objectives
• Unified design and action to achieve organizations
objective
• Strategy is a long range blue print of organizations
desired image, direction and destination.
• Igor H Ansoff
– The common thread among organization's activities and
product markets that defines essential nature of business
that organization has and plan to be in future
• William F Glueck
– A unified, comprehensive and integrated plan designed to
assure that the basic objectives of the enterprise are
achieved.
• Nature of strategy flexible and pragmatic (matter of facts)
• Flexible design to utilize opportunity and deal will threats for survival
and growth
• Strategy gives dynamic direction and focus
• Only goal and objective is not enough
• Strategy is a framework for senior manager to analyze opportunity
and threat and deal with it
• Strategy is not a substitute for sound, alert and responsible
management
• Strategy can never be perfect, flawless and optimum
• Art of possible and does not preclude second best choices
• Strategy is a direction and decision which management takes to
match resources and capabilities to deal will opportunity and threats.
• Strategy formulated at all three level
• Strategy is partly proactive and partly reactive
– Blend
– Proactive means work in advance mainly on the areas
like improving company’s market position and
financial performance
– Reaction means response to the change in
environment like responding to unanticipated market
development or changes
– Company use both
– Proactive is planned strategy and reactive is adaptive
reaction to change in environment
 Biggest portion
comes from past and
its proactive
 Concept of Strategic Management
• Company can survive in dynamic market by creating and delivering
superior value to its customer and also learning how to adept
continuously changing environment
• Developing strategies to make competition
• In changing environment company need to be farsighted and
visionary and must develop long term strategies
• Two fold objective
– Develop competitive advantage so company can out perform
competitors to have dominance in market
– Guide company successfully through all changes in environment
• Focus on long term survival and growth
• Analysis of environment and identifying opportunities and threat
and deals with it by using organizations resources and capabilities
• Heart of the business is crafting, implementing and executing
company’s strategy
• Definition
• The tem Strategic management refers to the
managerial process of
– developing strategic vision
– Setting objective
– Crafting strategy
– Implementing and evaluating the strategy
– And initiating corrective action when required
• Originally known as business policy, SM emphasis in
evaluation of external opportunities and threats in light
of companies strength and weakness and design
strategy for survival and growth
 Importance of SM
• Strategy is must
• Survival to fittest is applicable and fittest doesn’t means larger and
stronger business but the one who can adopt and change themselves
according to external factors
• Major benefits of SM
– Direction by defining goal and objective which are according to vision
– Helps organization to be Proactive in turbulent environment to deal
with it rather than flowing away
– Frame work for all major decision product, market, operation,
investment
– Makes organization ready to face future and act as pathfinder for
opportunities
– Serves as corporate defense mechanism against mistakes and pitfalls
and avoids to make costly mistakes
– Helps in longevity of business
– Core competencies and competitive advantage
 Limitation of SM
• Environment is complex and turbulent,
difficult to predict so sometime jeopardize all
plans
• Time consuming process
• Costly process
• In competition its difficult to clearly estimate
the competitive response of firm’s strategy
 Strategic Level in Organization
• Large organization are multidivisional and serve various businesses
and it has a self contained division to maintain this separate
business
• Three level - Corporate, Business and functional level
• General manager are found at first two level but difference in their
role and responsibilities
• There are various department in which are in depended and a
manager is responsible for its activities
• Manager need to develop core competencies and competitive
advantage for its division
• Each division is on the basis of product or services or on the basis of
functions
• Such independent division is known as Strategic Business Unit
• CEO and Senior • Strategy for individual • Responsible for
Executive, BOD business or SBUs particular business
• Oversee development • Strategic role is to function or operation
of strategy in overall translate general • General manager
organization statement of direction normally take care of
• Roles – Defining in concert strategy for whole organization
mission and goal, individual business while functional
Resource allocation • Corporate level is manger is responsible
among different about all the business for a particular
businesses while this is for function
• Providing leadership individual business • Manager responsible
• Link Between who • SBU managers are part to develop strategies
oversee strategic of business level for each function ore
development and who manager department like
own it (Management • The link between finance, HR, Operation
and Share holders) corporate level and • Execution of corporate
functional level and business level
strategy is key role

Corporate Business Functional

level Level Level
 SM in Govt and Non profit
Organization
• NGO and govt. organization normally enjoy monopoly but they
need to manage funds from outside so its important to use SM
• Education Institutes
– Uses concepts and practices frequently
– Environment is changing
– Tie up with organization
– Online education and online degree is a threat to traditional business
• Medical Organization
– Advance use of technology in medical field
– Door to door collection of sample
– Vertical integration by acquiring hospital, laboratory services etc.
– Online prescription and reports
– Various divisions which are specific to desease
• Government agencies and departments
– Strategy to use Tax payers money in effective and
efficient way
– There is less autonomy in government organization
– Normally cant diversified in unrelated businesses or
merge with firms
– Cant change their mission and objective
– Legislation and politician have direct impact on
decision of government organization
– Strategic issues of such organization are discussed and
debated in media and legislature