Strategic management involves planning, monitoring, and assessing an organization's goals and strategies to ensure success amid changing business environments. It includes analyzing internal/external factors, formulating action plans, executing plans, and evaluating results. Strategic management allows organizations to be proactive and exert control over their destiny by identifying opportunities and minimizing threats. Key roles in strategic management are held by consultants, entrepreneurs, boards of directors, CEOs, senior management, corporate planning staff, business unit executives, middle managers, and executive assistants.

1. Strategic Management Unit 6

2. What is Strategic Management?
• Strategic management is the ongoing planning,
monitoring, analysis and assessment of all that is
necessary for an organization to meet its goals
and objectives. Changes in the business
environment require organizations to constantly
assess their strategies for success. The strategic
management process helps organizations take
stock of their present situation, chalk out
strategies, deploy them and analyze the
effectiveness of the implemented management
strategies.

3. Example of Strategic Management
• For example, a for-profit technical college wishes to
increase enrollment of new students and graduation of
enrolled students over the next three years. The purpose is
to make the college known as the best buy for a student's
money among five for-profit technical colleges in the
region, with a goal of increasing revenue.
• In the above case, strategic management means ensuring
that the school has funds to create high-tech classrooms
and hire the most qualified instructors. The college also
invests in marketing and recruitment and implements
student retention strategies. The college’s leadership
assesses whether its goals have been achieved on a
periodic basis.

4. Five stages of strategic management
process
• assessing the organization's current strategic
direction;
• identifying and analyzing internal and external
strengths and weaknesses;
• formulating action plans;
• executing action plans; and
• evaluating to what degree action plans have
been successful and making changes when
desired results are not being produced.

5. Benefits of Strategic Management to
Organization
• Strategic management allows an organization
to be more proactive than reactive in shaping
its own future; it allows an organization to
initiate and influence (rather than just
respond to) activities and thus to exert control
over its own destiny.

6. • It allows for identification, prioritization, and exploitation of opportunities.
• It provides an objective view of management problems.
• It represents a framework for improved coordination and control of
activities.
• It minimizes the effects of adverse conditions and changes.
• It allows major decisions to better support established objectives.
• It allows more effective allocation of time and resources to identified
opportunities.
• It allows fewer resources and less time to be devoted to correcting
erroneous or ad hoc decisions.
• It creates a framework for internal communication among personnel.
• It helps integrate the behavior of individuals into a total effort.
• It provides a basis for clarifying individual responsibilities.
• It encourages forward thinking.

7. Relevance of Strategic Management
• Strategic Alliances-If you have a goal for the organization you work for to
grow rapidly, then you look around for strategic market alliances, which is
related to situational analysis. For example, private companies can use the
acquisition of smaller companies to expand their market base and then
introduce the products of those companies in their existing stores.
• Innovation-Strategic management also encourages organizations to look
everywhere for new ideas, which is truly the essence of entrepreneurial-
ism. For example, a U.S. chain store that expands into global markets can
share ideas that work for managing a retail operation in another country
with store managers in its home country. Managers are encouraged to test
foreign ideas in their home market.

8. Strategic Management in India
• Because of the obvious benefits that strategic
management possesses, it is gaining relevance among
Indian corporates. These benefits are as follows –
• Strategic management is helping Indian corporates in
giving their businesses a direction-India’s booming
economy is home to a variety of start-ups. These start-
ups are new and need to stay focused. A good strategy
allows them to keep their eyes on the goal. It helps
them set clear goals on what business they want to be
in and what kind of customers they want to serve. With
the plethora of market segments available in a vibrant
economy, it is easy to get confused. A clear-cut strategy
helps organizations stay out of the confused state.

9. • Strategic management allows situational analysis
through management tools-One of the management
styles in strategic management is called situational
analysis. It helps a business evaluate itself in its current
market. By doing this they can define where they want
to be, their future course of action and the time frame
that they want to define for reaching their goals. They
can clearly fine-tune their working to achieve their
goals by knowing how far they need to go from where
they currently are. It helps them know how much
resources they need to direct to achieve the desired
result in the stipulated time frame.

10. • Strategic management helps look around for strategic
alliances-Once a company has a set of goals and a time
frame to achieve those goals, they can find out means that
can help them speed up their process of achievement of
the decided goals. One of those means is a strategic
alliance. A strategic alliance can happen between two
organizations which have similar or complementing
strategic objectives. They can have a partnership, or a
bigger firm can acquire a smaller one. This provides both
the sides access to each other’s resources and customer
base. They can place each other’s products in their stores.
In this manner, by tying the growth of the organization with
the strategic alliances, one can fasten the goal completion.

11. • Strategic management encourages
innovation-Innovation is one of the key
criteria for keeping a business relevant in the
eyes of the customers. It keeps the company
on its toes and encourages employees to
create new products and processes which are
better than the previous ones.

12. Role of strategists
• Strategists are individuals or groups who are
primarily involved in the formulation,
implementation, and evaluation of strategy. In a
limited 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.

13. 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

14. • 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.

15. • 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.

16. • 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).

17. • 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.

18. • 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.

19. • 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

20. • 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.
• 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

21. • 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 analysis,
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”.