Published on

1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide


  1. 1. Strategic Management BHRM 31124 R.A.Ishanka Chathurani Lecturer (prob) Department of Human Resource Management Faculty of Commerce & Management Studies University of Kelaniya
  2. 2. Nature and Scope of Strategic Management <ul><li>Learning Outcomes </li></ul><ul><li>Define what is meant by strategic management </li></ul><ul><li>Understand the dimensions of strategic decision </li></ul><ul><li>Understand the benefits of strategic management </li></ul><ul><li>Explain how strategic priorities vary by level; Corporate level, Business level and Operational level </li></ul>
  3. 3. What is Strategic Management? <ul><li>Strategic management understands the strategic management position of an organization, strategic choices for the future and turning strategy into action. (Johnson & Scholes,2008) </li></ul><ul><li>Strategic management is the term that is now preferred over earlier terms such as corporate planning and strategic planning </li></ul>
  4. 4. Cont… What is Strategic Management? <ul><li>Thus Strategic management is , an art and science of formulating, implementing and evaluating cross functional decisions that enable of an organization to achieve its objectives (Fred R.David,2006) </li></ul>
  5. 5. Dimensions of Strategic Decision <ul><li>Strategic issues require Top-management support </li></ul><ul><li>Strategic issues involves allocation of large amount of resources </li></ul><ul><li>Strategic issues tend to have a significant impact on the long term prosperity of the firm </li></ul><ul><li>Strategic issues are future oriented </li></ul><ul><li>Strategic issues have company-wide consequences </li></ul><ul><li>Strategic issues necessitate considering factors in the firm’s external environment </li></ul>
  6. 6. Benefits of Strategic Management <ul><li>Strategic management allows an organization to be proactive than reactive in shaping its own future </li></ul><ul><ul><li>Financial Benefits </li></ul></ul><ul><ul><ul><li>Improvements in sales </li></ul></ul></ul><ul><ul><ul><li>Profitability </li></ul></ul></ul><ul><ul><ul><li>Productivity </li></ul></ul></ul>
  7. 7. Non-Financial Benefits <ul><li>It allows to identification, prioritization and exploitation of opportunities </li></ul><ul><li>It provide an objective view of management problems </li></ul><ul><li>Represent a framework for improved coordination and control of activities </li></ul><ul><li>Minimize the effect of adverse condition and changes </li></ul><ul><li>Allows major decisions to better support established objectives </li></ul><ul><li>Allows more effective allocation of time and resources to identified opportunities </li></ul><ul><li>Allows fewer resources and less time to be devoted to correcting erroneous and adhoc decisions </li></ul><ul><li>Create a framework for internal communication among personnel </li></ul><ul><li>Helps integrate the behaiour of individuals into a total effort </li></ul>
  8. 8. Guidelines for Effective Strategic Management <ul><li>Open mindedness </li></ul><ul><li>Resource bound </li></ul><ul><li>Trade-off between different objectives </li></ul>
  9. 9. Levels of Strategy in an Organization <ul><li>Any level of the organization can have objectives and devise strategies to achieve them </li></ul><ul><li>According to Hofer and Schendle there are three levels of strategies, </li></ul><ul><ul><li>Corporate level strategy, </li></ul></ul><ul><ul><li>Business level strategy and </li></ul></ul><ul><ul><li>Functional level strategy. </li></ul></ul>
  10. 10. Cont… Levels of Strategy in an Organization <ul><li>Corporate Level Strategy </li></ul><ul><ul><li>According to Johnson and Scholes corporate level strategy is concerned with what types of business the organization is in </li></ul></ul><ul><ul><li>Corporate strategy is formulated by top management to oversee the interests and operations of organizations that contain more than one line of business. </li></ul></ul>
  11. 11. Cont… Corporate level strategy <ul><li>Various aspects of corporate strategy </li></ul>Characteristics Comments Scope of activities Strategy and strategic management impact upon the whole organization: all parts of the business operation should support and further the strategic plan Environment The organization counters threats and exploits opportunities in the environment Resources Strategy involves choices about allocating or obtaining corporate resource now and in future Values The value systems of people with power in the organization influence its strategy Timescale Corporate strategy has a long-term impact Complexity Corporate strategy involves uncertainty about the future, integrating the operations of the organization and change
  12. 12. Business Level Strategy <ul><li>Business level strategy has an organization approaches a particular product market area </li></ul><ul><li>Business strategy can involve decisions such as whether to segment the market and specialize in particular profitable areas, or to compete by offering a wider range of products </li></ul>
  13. 13. Functional Level Strategy/Operational Strategies <ul><li>Functional strategies concerned with how the components part of an organization deliver effectively the corporate and business level strategies in terms of resources, processes and people </li></ul>
  14. 14. Cont… Summery Functional area Comment marketing Diversifying products and services pricing, promoting and distributing them, in order to satisfy customer needs at a profit. Marketing and corporate strategies are interrelated Production Factory location, manufacturing techniques, outsourcing and so on Finance Ensuring that the firm has enough financial resources to fund its other strategies by identifying sources of finance and using them effectively HRM Secure personnel of the right skills in the right quantity at the right time, and to ensure that they have the right skills and values to promote the firm’s overall goals Information systems A firm’s information systems are becoming increasingly important, as an item of expenditure, as administrative support and as a tool for competitive strength. Not all information technology applications are strategic, and the strategic value of IT will vary from case to case
  15. 15. The Challenges for Strategic Management <ul><li>Preventing strategic drift </li></ul><ul><li>Strategic drift is where strategies progressively fall to address the strategic position of the organization and performance deteriorates </li></ul><ul><li>The need of understand and address contemporary issues </li></ul><ul><li>The benefit of viewing strategy in more than one way(strataegy lenses) </li></ul>
  16. 17. Strategic Management Position <ul><li>The environment </li></ul><ul><li>Strategic capability </li></ul><ul><li>Expectations and purposes </li></ul>
  17. 18. Strategic choices <ul><li>Business level strategy </li></ul><ul><li>Corporate level and international </li></ul><ul><li>Developmental directions and methods </li></ul>
  18. 19. Strategy into action <ul><li>Organizing </li></ul><ul><li>Enabling </li></ul><ul><li>Managing change </li></ul>
  19. 20. Strategic Drift Environment Change Strategic change
  20. 21. Contemporary issues <ul><li>Internationalization </li></ul><ul><li>E-commerce </li></ul><ul><li>Changing purposes </li></ul><ul><li>Knowledge and learning </li></ul>
  21. 22. Strategy Lenses <ul><li>Strategy as design </li></ul><ul><li>Strategy as experience </li></ul><ul><li>Strategy as ideas </li></ul>