Management Theory & Practice Robbins, S. Coulter M. For Graduate and Post Graduate Students

1. Imran Ashiq Computer People 2000 1
Lecture # 2
Strategic
Management

2. Imran Ashiq Computer People 2000 2
Strategic Management
The set of managerial decisions and actions that
determines the long term performance of an
organization.
SM can also be defined as the art and science of
formulating, implementing, and evaluating cross
functional decisions that enable an org. to achieve
its objective.
SM focuses on integrating management, marketing,
finance/accounting, production/operation, research
and development and computer information system
to achieve a org. success.

3. Imran Ashiq Computer People 2000 3
Strategic Management
All the org.’s strategies must be planned
and organized, put into effect and
controlled.

4. Imran Ashiq Computer People 2000 4
Strategic Management Process:
Identify the Org.’s
Current Mission,
Objectives, and
Strategies.
1
Analysis the
Environment
Identify the
Opportunities
&Threats
Analysis the
Org’s resources
Identify the
Strengths &
Weaknesses.
3
54
2
SWOT Analysis

5. Imran Ashiq Computer People 2000 5
Strategic Management Process:
Formulate
Strategies
Implement
Strategies
Evaluate
Results
6 7 8

6. Imran Ashiq Computer People 2000 6
1. Identifying the Organization.
Org. is identified by its Mission Statement,
Objective and Strategies.
Mission Statements are
 Statement of purpose that distinguish one
business from other similar firms.
 A mission statement identify the scope of a
firm's operations in product and market terms.”
It basically address the question like,
“What is our business.”

7. Imran Ashiq Computer People 2000 7
1. Identifying the Organization.
For example:
 The purpose/mission of any business org. is the
production of goods and services.
 The purpose of the court is the interpretation of
laws and their application.
 The purpose of university is teaching and
research.

8. Imran Ashiq Computer People 2000 8
1. Identifying the Organization
Component of mission statements include:
 Who are the org. customers?
 What are the org.’s major products or services?
 Where does the org. compete geographically?
 How technology current is the org?
 What are the org. basic beliefs, values and
aspiration, and ethical priorities?

9. Imran Ashiq Computer People 2000 9
1. Identifying the Organization
Goals/objective:
 Desired outcome for individuals, groups, or
entire organization.
 Goals are objectives and they provide direction
for all management decisions.
Strategy:
 The determination of the basic long term
objectives of an enterprise
 And the adoption of courses of action
 And allocation of resource necessary to achieve
these goals.

10. Imran Ashiq Computer People 2000 10
2. Analyzing the Environment
The screening of large amounts of information to
anticipate and interpret changes in the environment.
Managers in both small and big org. use
environmental scanning.
Extensive environment scanning affect an
organization’s current or planned activities.
Environment scanning identify
 Who competitors are,
 What they are doing, and
 How their actions will affect the organization.

11. Imran Ashiq Computer People 2000 11
3. Identifying Opportunities and
Threats
Opportunity: Positive trends in external
environmental factor for the org.
Threats: Negative trends in external environmental
factor for the org.
These competitive trends and events could
significantly benefits and harm an organization in the
future.
A basic principle of SM is that firm needs to
formulate strategies to take advantages and to avoid
or reduce impact of external threats.

12. Imran Ashiq Computer People 2000 12
4.Analyzing the Org.’s Resources
and Capabilities
The internal analysis provides important
information about an org.’s specific resource and
capabilities.
For Example: What skills and abilities do the
org.’s employee have?
 What is org. financial position?
 How do customer perceive the org. and the
quality of its product or service?
If any of these org. capabilities or recourses are
exceptional or unique, they are called Core
Competencies.

13. Imran Ashiq Computer People 2000 13
5. Identifying Strengths and
Weaknesses
Strengths: Any activities that org. does well or any
unique resources that it has.
Weaknesses: Activities the org. does not do well
or resources it needs but does not posses.
Identifying and evaluating org. strengths and
weakness in the functional area of business is a an
essential SM activity.
The merging of step 2 to 5 results in an assessment
of the org.’s internal resources and capabilities and
external opportunities. (SWOT Analysis)

14. Imran Ashiq Computer People 2000 14
6. Formulating Strategies
Formulation of a Strategy include following steps:
 Developing a vision and mission statement,
 Identifying org. external opportunities and
threats,
 Determining internal strengths and
weakness,
 Establishing long term objectives
 Generating alternative strategies
 Choosing particular strategies to pursue.

15. Imran Ashiq Computer People 2000 15
7. Implementing Strategy
Strategy Implementation include following:
Establish Annual Objectives.
Devise Polices
Motivate Employees
Allocate resources. So that formulated
strategy can be executed.

16. Imran Ashiq Computer People 2000 16
8. Evaluating Results
SE is the final stage in SM.
Three fundamental strategy evaluation
activities are:
I. Reviewing External and Internal factors
that are basis for strategy.
II. Measuring Performance
III. Taking corrective measure.