The illiterate of the 21

st
century will not be those
who cannot read and write, but those who cannot
learn, unlearn, and relearn. Alvin Toffler,
daily Dawn 3 Feb 12
Welcome and introduction to
Strategic Management
(StM)
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COURSE PROFILE
SEMESTER FALL-2014
MBA 6A+C

STRATEGIC MANAGEMENT
MGT - 625


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COURSE DESCRIPTION
Todays Business World is extremely competitive. It
relies heavily on the decisions made by its (Strategic)
Managers / Strategic Management. The strategic
managers must develop panoramic view of business
environment, i.e., both internal and external. The
managers of modern businesses should be adequately
skilled to pre-empt the situation rather than resorting to
reactive mode. Recent economic slowdown and
currency war raging between the USA, Europe (Euro
Zone) and China are cases in example. Therefore, the
strategic management course has been designed to
enable you to learn not only the fundamentals, but also
the intricacies of higher levels of management. A careful
look at the schedule would let you know the progression
of the course.
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COURSE OBJECTIVES

Develop an understanding of Strategy and Strategic
Management and its application to complex
relationships that exist in todays environment.
Develop an awareness of the various environmental
contexts under which strategic formulation and
implementation occur.
Develop an ability to thoroughly analyze business
problems.
Develop an ability to function effectively as a member or
a chairperson of a strategic team and,
Develop an ability to effectively communicate strategic
thinking, both orally and in writing.

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Recommended Books
Dess, Gregory G; Lumpkin, G.T.;
Eisner, Alan B. Strategic
Management Text and Cases.
2006. The McGraw-Hill Companies,
Inc., NewYork.
Cases in Strategic Management by
Amita Mital
Strategic Management: Concepts
and Cases By Fred R. David5
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Lecture Delivery Plan

As per Course Profile


Shahid Nawaz
Assist. Professor
0345-5139748

Email: csn724@gmail.com
OR
Qaisera5210@yahoo.com


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WHAT IS STRATEGIC MANAGEMENT?

Without a strategy, an organization is like a ship
without a rudder, going around in circles. Its like
a tramp; it has no place to go. Joel Ross & Michael Kami (Fred 2011)
According to Wheelen and Hungers study (2006), STM is a set of
managerial decisions and actions that determines the long-term
performance of a corporation. It involves
environmental scanning (both external and internal), strategy formulation
(strategic or
long range planning), strategy implementation, and evaluation and control. They
emphasize the analyzing and evaluating of external opportunities and threats in
terms
of an organizations strengths and weaknesses.
From the perspectives of Dess and Miller (1993), STM is a process
that combines three major interrelated activities: strategic analysis,
strategy formulation and strategy implementation.


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STM Defined
In the other way, Lamb (1984) states that strategic
management is an ongoing process that:
Evaluates and controls the business and the industries in
which the company is involved;
assesses its competitors and sets goals and strategies
to meet all existing and potential competitors; and then
reassesses each strategy annually or quarterly to
determine how it has been implemented and whether it
has succeeded or needs replacement by a new strategy
to meet changed circumstances, new technology, new
competitors, a new economic environment, or a new
social, financial, or political environment.

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PURPOSE OF STRATEGIC MANAGEMENT.
Regardless of the size, the scale, every
organization needs to adopt a well-
planned strategic management to survive
and compete in the market and try to
optimize for tomorrow following the trend
of today.

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SUCCESSFUL STRAT MGMT
An industry is composed of a set of firms that produce
similar products or services, sell to similar customers,
and use the similar methods of production.
Gathering industry information and understanding
competitive dynamics among the different companies in
an industry is key to successful strategic management.
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LP-1 dt 1 Sep 14
Ch-1 Strat. Mgmt Creating
Competitive Advantages
Learning Objectives
Definition and 4 key attributes of Strat. Mgmt
The Strat. Mgmt Process and its 3 related principal
activities
Corporate Governance
Environmental Forces
Vision, Mission and Objectives Awareness of
STRATEGIC MANAGEMENT MODEL
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1.Establish vision,
Purpose, values, and
3-5 yrs scorecard
2. determine
annual
Obj & Goals
3. Address
implementation
Barriers
7. Identify drivers with
Targets for annual
Objectives
6. Develop project action plans
For drivers
5. Charter improvement
teams
And
Create infrastructure
4. Design and execute
communication
plan
8. Execute Project
Action
Plans
9. Review Project plan
In a database
And systematic
process
10. Sustain the
Improvements
(Trg & Doc)
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Planning
Development
Implementation
Do
Proj
Mgmt
Study
Perfor
mance
Evaluat
ion
Act
Instituti
onalize
Annual strategic planning
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STRAT MGMT & CEO
All Org are run by the CEOs
Role of CEOs
CEOs are synonymous with the success and failure of the org
Strat Mgmt is based on participatory decision making techniques
with the CEO taking full responsibility for the outcome
Leadership roles:
Romantic ---- Leader is the key to success or failure
External Factor ---- Focus is on the external factors for success
or failure of the Org
Recent examples:
BP Oil Rig disaster in Florida Bay and its fallout
Corporate fines against BOA, SC Bank, Lehman Brothers etc
Downfall of BCCI
Recent economic downturn in USA / Euro Zone / DPW etc
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STRAT MGMT
The Essence of STRAT MGMT is to focus on 2 fundamental
questions:
How should we compete in order to create competitive
advantages (CA) in the market place
How can we create competitive advantage in the market place
that are not only unique, sustainable and valuable but also
difficult for competitors to copy or substitute.
Important to note is:
Sustainable CA cannot be achieved without operational
effectiveness which means performing similar activities better
than rivals.
Operational Effectiveness includes concepts of TQM, just-in-time,
benchmarking, business process reengineering, and outsourcing etc
Strategy is all about being different from everyone else.
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STRAT MGMT DEFINITION
What is Strat Mgmt?
Step further than incremental management Taking
minor decisions in a stable, simple and unchanging
industry.
Does it happen always? No, therefore, need for Strat
Mgmt which is defined as:
Analyzing, taking decisions, and initiating actions in
order to create and sustain competitive advantage.
Biggest Question
How (and when) and why do some firms outperform
others?
Critical Answer
The challenge to managers is to decide on strategies that
provide advantages that can be sustained over time
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STRAT MGMT AND 4 KEY ATTRIBUTES
Directed at overall organizational goals
Looking at the strategic issues rather than functional areas
What to produce and at what cost
Involving multiple stakeholders
Involve owners, employees, customers, suppliers, and the
community at large
Incorporating short term and long term perspectives
Keep an eye on the current production needs as well as vision
for the future ---- Creative Tension
Recognizing need for trade-offs between efficiency and
effectiveness
Using organizational resources wisely and optimally

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THE STRAT. MGMT PROCESS
It involves 3 related principal activities:
Analysis
Of strategic goals (V + M + Strat Obj)
Internal and External Environment of the Org
Decisions (Strategic)
Based on Orgs domestic and international operations, the Org
should address 2 basic questions, i.e.,
1. What industries should we compete in?
2. How should we compete in those industries?
Actions
In order to achieve success as a result of decisions, the
necessary resources must be made available for a desirable
outcome.
It is a continuing process and seeks intimate involvement of CEO
Be able to differentiate between Intended Strategy and
Realized Strategy
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Environmental Forces


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Internal
Environment
Culture
Resources
Task
Environment
Industry

Societal
Environment
Sociocultural
Focus
Politico-Legal
Forces
Technological
Forces
Economic
Forces
Suppliers
Shareholders
Employees
Interest Groups
Customers
Creditors
Communities
Trade Associations
Competitors
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CORPORATE GOVERNANCE AND STAKEHOLDERS
MANAGEMENT

Management (CEO)
To run the Org to satisfy the interests and needs of
the shareholders under the guidelines prepared by
BOD
Shareholders (Owners)
BOD (Elected by the shareholders to represent
their interests)
To align the interests and motives of the management
with those of the owners

ROLE OF CEO--- Electronic Data System since 1962
In 1998 --- EDS earned $22Bn (Total market $140Bn) as
Revenue with shares trading at $35.
In March 2003 --- Shares shrunk to $16. Additionally,
EDSs reputation was tarnished due investigations by
S&EC resulting in loss of competitive position.
EDS CA -- technical competence, steady growth, old
CEOs conservative culture --- crisp white shirt and
military cut hair style v/s new CEOs culture --- gung-ho
style to get rid of bureaucratic life style
To spur growth the new CEO pushed for megadeals
requiring outsourcing companies to make large
investments. Resultantly, stocks were pushed up to $77.
By 2001, CEO (Mr. Brown) received $52M in
compensation.
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EDS- WHAT WENT WRONG
CEOs Attitude --- Over ruling the managers
By 2002, Navy contract suffered loss of $1.9Bn due poor
calculation of margins Megadeals / megarisks
In the same time frame, a contract with Worldcom signed
in 1998 incurred a loss of $118M due bankruptcy of
Worldcom as a result of Internet Bubble Burst
2002 estimates were fudged and investors were assured
of 13-14% growth despite recession
Stocks plunged to $11.68
By 2003, EDS BOD lost patience and replaced CEO
Closing statement: Pay for performance, differentiate
performance- not organizational level.make difficult
choices. Do as I say, not as I do.

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Creating Symbiosis or Zero Sum
Two views
1. Zero Sum --- All the stakeholders are to be satisfied:
Employees want higher wages
Shareholders want higher profits
Zero sum concept gives rise to Unionism
2. Stakeholder symbiosis ---- Managers acknowledge
interdependence between employees, suppliers,
customers, shareholders and the community at
large

CORPORATE GOVERNANCE AND STAKEHOLDERS
MANAGEMENT --CONTD

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Corporate Governance and Social Responsibility
Social Responsibility is the expectation that businesses or
individuals will strive to improve the overal welfare of the society.
Companies have determined Triple Bottom Line which is:
Financial Measures / Capital
Ecological and material capital
Renewable resources generated by living systems, such as
wood or animal by-products
Human and Social capital
Human deals with peoples knowledge, skills, health,
nutrition, safety, security, and fossil fuels
Social includes assets of civil society, social cohesion, trust,
reciprocity, equity and other values that provide mutual
benefits
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THE STRAT. MGMT Perspective --- An imperative
It requires managers to take an integrative view of the
Org and assess how all of the functions and activities
fit together to help an Org achieve its goals and
objectives.
Some Key Driving Forces are:
1. Globalization
Global economy is NOT the flow of goods only but it is flow
of capital, people, and information worldwide.
2. Technology
Innovative technology is having impact on our lives, trade,
services and products (Innovation, Invention and
digitization)
3. Intellectual Capital
Creating and applying knowledge to deliver differentiated
products and services of superior value for customers
require the acquisition of superior talent, as well as ability
to develop and retain that talent
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Role of Leaders
Thinking and Working groups can not be
different and separated (System Approach)
Ideas must be encouraged, analyzed and
implemented
Trg and Dev must move hand in glove
EMPLOYEES AND STRAT MGMT
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VISION, MISSION AND OBJECTIVES
Vision tend to be quite broad, and can be inspiring,
overarching and emotionally driven
Org express priorities best through stated goals and
objectives that form a hierarchy of goals
Hierarchy of goals is the Companys Vision
A vision may or may not succeed
Give examples of vision:
GOP
BU
Unilever
Telenor
PTCL
Engro Foods


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MISSION
It encompasses both the purpose of the company as well
as the basis of competition and competitive advantage
More specific and depict rationale for existence of org
Effective mission statements incorporates the concept of
stakeholder management, suggesting that org must
respond to multiple constituencies if they are to survive
and prosper.
They also have the greatest impact when they reflect an
orgs enduring, overarching strategic priorities and
competitive positioning.
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STRATEGIC OBJECTIVES
Operationalization of Mission statement
Outlining Strategy how to achieve higher goals
Cover well defined time frame
Resources are identified and allocated
To be meaningful, Objectives must be:
Measurable
Specific - clear and concise
Appropriate - Consistent with vision and mission
Timely Have a time frame

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Thank you