This document provides an overview of strategic management concepts. It defines strategy as a series of actions determined by a firm's situation to achieve goals. Strategic management is described as analyzing, formulating, implementing, and evaluating actions to achieve organizational objectives. The strategic management process involves selecting a mission, analyzing external opportunities/threats and internal strengths/weaknesses, and selecting strategies to leverage strengths and address weaknesses. Cognitive biases that can influence strategic decision-making are also discussed.

1. Strategic Management
Book reference- Strategic management
(8th
edition)
Charles W.L. Hill
Gareth R. Jones

2. Chapter-1-Introduction
 Strategy
Strategy is a series of actions by a firm that are decided according
to the particular situation.
Strategy is the determination of the basic long-run goals and
objectives of an enterprise, and the adoption of courses of action
and the allocation of resources necessary for carrying out those
goals.
Strategy is an action that managers take to attain one or more of
the organization’s goals.
Strategy is the forging of company missions, setting objectives for
the organization in light of external and internal forces, formulating
specific policies and strategies to achieve objectives, and ensuring
their proper implementation so that the basic purposes and
objectives of the organization will be achieved.

3.  Strategy
Strategy
opportunity
Discover
Strength
Apply, sustain
Weakness
Overcome Threat
Avert

4.  Management
Management is the process of designing and maintaining an
environment in which individuals, working together in groups,
efficiently accomplish selected aims.
 Strategic management
Strategic management is a process of analyzing, formulating,
implementing and evaluating some set of actions taken or to be
taken for the achievement of predetermined organizational goals
and objectives.
It focuses on integrating management, marketing, finance,
accounting, productions/operations, research and development and
CIS to achieve organizational success.
 Strategic planning
A strategic planning is a process which describes how a firm will
adapt to take advantages of opportunities in its constantly changing
environment, in order to maintain a strategic fit between the firm’s
goals and capabilities and these market opportunities.

5. ◦ Corporate level:
CEO, other senior
executives and
corporate staff
◦ Business level:
Divisional manager
◦ Functional level:
functional manager
Head office
Division-A
Division-B Division-C
Business function Business function Business function

6.  Strategic Management Process
 Select the corporate mission and major
corporate goals.
 Analyze the organization’s external competitive
environment to identify organization’s
opportunities and threats.
 Analyze the organization’s internal operating
environment to identify organization’s strengths
and weaknesses.
 Select strategies that build on the organization’s
strengths and correct its weaknesses in order to
take advantage of external opportunities and
counter external threats.
 Implement the strategy.

7.  Strategic intent
Strategic intent refers to an obsession with achieving an
objective that stretches the company and requires it to build
new resources and capabilities.
 Vision, mission, goal and objective
Vision- The highest aspirations and ideals of a person or
organization; what a firm wants to be. Vision statements
often describe the firm or organization in lofty, even
romantic or mystical tones.
Mission- An organization’s mission is an overall goal of the
organization that provides a sense of direction and a guide
to decision making for all levels of management.
It should define the organization line of products, identifying
its products or services and specify the markets it serves at
present and within a time frame work.

8.  Mission statement should include the
following components:
 Target customers and markets.
 Principal products and services.
 Geographic domain.
 Core technologies.
 Concern for survival , growth and maturity.
 Organizational self concept.
 Desired public image.
 Values and guiding standard.
 Major goals and objectives.
 Goals-
A goal is a desired future state or objective that a company
attempts to realize. The purpose of goals is to specify with
precision what must be done if the company is to attain its
mission or vision.

9. Characteristics of well constructed goals-
SMART-
o Specific.
o Measurable.
o Attainable.
o Realistic and
o Timeliness.
Qualities of a strategic leader
 Vision, eloquence, and consistency
 Articulation of the business model
 Commitment
 Being well informed
 Willingness to delegate and empower
 The astute use of power
 Emotional intelligence (self awareness, self-regulation,
motivation, empathy, social skills

10.  Self awareness: The ability to understand one’s own
moods, emotions, and drives as well as their effect on
others.
 Self-regulation: The ability to control or redirect
disruptive impulses or moods, that is , to think before
acting.
 Motivation: A passion for work that goes beyond money
or status and a propensity to pursue goals with energy and
persistence.
 Empathy: Understanding the feelings and viewpoints of
subordinates, and taking those into account when making
decision.
 Social skills: Friendliness with a purpose.

11.  Cognitive biases and strategic decision
making
Prior hypotheses bias: Prior hypothesis biases refers to the
fact that decision makers who have strong prior belief about
the relationship between two variables tend to make decisions
on the basis of these beliefs, even when presented with evidence
that their beliefs are wrong.
Moreover, they tend to seek and use information that is
consistent with their prior beliefs while ignoring information that
contradicts these beliefs.
 Escalating commitment: It occurs when decision makers
having already committed significant resources to a
project, commit even more resources if they receive feedback
that the project is failing.

12.  Reasoning by analogy: It involves the use of simple
analogies to make sense out of complex problem.
Representativeness: It is a bias rooted in the tendency to
generalize from a small sample, or even a single vivid
anecdotes.
 Illusion of control: It is the tendency to overestimate
ability to control events. Top level management seems to be
particularly prone to this bias, having risen to the top of an
organization, they tend to be overconfident about their
ability to succeed.
Availability error: The availability error arises from our
predisposition to estimate the probability of an outcome
based on how easy the outcome is to imagine.

13.  Technique for improving decision making
Devils advocacy
Expert plan
Devil’s advocate
criticizes
Devil’s advocate
criticizes

14.  Dialectic inquiry
Expert plan-1
(Thesis)
Final plan
Debate (synthesis)
Expert plan-2
(Antithesis)