The document outlines strategic management principles, emphasizing its definition as a combination of art and science for achieving organizational goals through effective decision-making. It highlights the significance of mission statements in guiding firms' operations and their correlation with improved financial performance, as well as various components of a mission statement. Additionally, the document discusses the strategy formulation process, its modes, and the importance of objectives and goals in guiding a firm's direction.

1. Strategic
Management
Hours Allotted: 30
maximum Marks: 50
B.Sc. HHA, IGNOU/NCHMCT Curriculum

3. Organizational Strategy
4 hours (15% weightage)
• What is strategic Management?
• Definition
• Strategic management can be defined as the art and
science or formulating, implementation and
evaluation cross-functional decisions that enable an
organization to achieve its objectives.
• Therefore Strategic management focuses on
integrating management, marketing,
finance/accounting, production/operations, research
and development and computer information system to
achieve organizational success.
• Three stages of Strategic management process are,
Strategy formulation , Strategy implementation and
strategy evaluation .

4. Mission Statement: Elements
and Importance
• Definition of mission statement:
• Mission statements are “enduring statements of
purpose that distinguish one business from other
similar firms. A mission statement identifies the
scope of a firms operation in product and market
terms.”
• It addresses the basic question that faces all
strategists:
• What is our business?
• A clear mission statement describes the values and
priorities of an organization.
• Developing M/S compels strategists to think about
the nature an scope of present operations and to
assess the potential attractiveness of future
markets and d activities.

5. Importance of Mission
statement.
• Firms with formalized mission statements have
twice the average return on shareholders’ equity
that those firms without a formalized mission
statement. Ratrick and Vitton.
• There is a positive relationship between mission
statements and organizational performance. Bart
and Baetz
• Firms using mission statements have a 30% higher
return on certain financial measures that those
without such statements. Business week.
• O’Gorman and Doran however found that having a
mission statement does not directly contribute
positively to financial performance, The extent of
managers and employee involvement in developing

6. Elements/Characteristics of a
mission statement
• A declaration of attitude.
• A customer orientation
• A declaration of social policy
• IHCL's mission is to improve the quality of
life for the communities it serves globally,
while its vision is to be the most iconic and
profitable hospitality company in South Asia.
IHCL's values are guided by principles such as
serving stakeholders with dedication, creating
a happy environment, and celebrating diversity.
IHCL's culture is called Tajness, and its
strategy is called Ahvaan 2025.

7. • Apple's mission statement is to provide
customers with the best user experience through
its innovative hardware, software, and
services. Apple's vision statement is that they
are on earth to make great products, and that
this will not change.
• Google's mission is to organize the world's
information and make it universally accessible
and useful. Its vision is to provide access to
the world's information in one click.
• We believe in what people make possible. Our
mission is to empower every person and every

8. • Airtel's Mission, Vision and Values The Way
Ahead At airtel, we always put you at the heart
of what we do. We strive to enhance your
experience with us and build a lasting
relationship with you by delivering better
results every time. And this, reflects in our
mission too.
• Reliance To build a global enterprise for all
our stakeholders, and great future for our
country, To give millions of young Indians the
power to shape their destiny, The means to

9. Components of mission
statement
1. Customers; Who are the firm’s customers?
2. Products and services: What are the firms major
products and services.
3. Markets: Geographically ,where does the firm
compete?
4. Technology: Is the firm technologically current?
5. Concern for survival, growth and profitability:
Is the firm committed to growth and financial
soundness?
6. Philosophy: What are the basic beliefs, values,
aspirations and ethical priorities of the firm?
7. Self concept: What is the firm’s distinctive
competence, or major competitive advantage?
8. Concern for public image? Is the firm responsive
to social, community and environmental concerns?
9. Concern for employees: Are employees a valuable

10. Objectives
• Objectives are the results expected from pursuing
strategies.
• Nature of Objectives: The objectives must be:
• Quantitative
• Measurable
• Realistic
• Understandable
• Challenging
• Hierarchical
• Obtainable and congruent among organization al units.
• Time bound
• Objectives are commonly stated in terms of :
• Growth in assets
• Growth in sales
• Profitability
• Market share
• Degree and nature diversification
• Degree and nature of vertical integration, earning per
share, and social responsibility.

11. Necessity of formal objectives
• Provide direction
• Allow synergy
• Aid in evaluation
• Establish priorities
• Reduce uncertainty,
• minimize conflicts,
• stimulate exertion and
• Aids in allocation of resources and design of jobs.
Long term objectives are needed at the corporate,
divisional and functional levels in an organization .
They are important measure of managerial performance.

12. 12
Objectives
• Specific
• Measurable
• Narrow
• Tactical—short-range,
set by managers to
support the
accomplishment of
goals
Goals
• General
• Intangible
• Broad
• Abstract
• Strategic—long-range
direction, set by
senior management
Goals define what should be accomplished while
objectives define the actions needed to achieve the
goal.
Goals vs Objectives

13. Developing strategies-Strategy
Formulation:
Meaning, Aspects, Process, Approaches and
Challenges.
• Strategy formulation is the process of offering proper
direction to a firm.
• Strategy Formulation seeks to set the long-term goals
that help a firm exploit its strengths fully and encash
the opportunities that are present in the environment.
• There is a conscious and deliberate attempt to focus
attention on what the firm can do better than its
rivals. To achieve this, a firm seeks to find out what
it can do best.
• Once the strengths are known, opportunities to be
exploited are identified; a long-term plan is chalked
out for concentrating resources and effort.
• Henry Mintzberg, after much research found that
strategy formulation is typically not a regular,
continuous process. “It is small often an irregular,

14. • Performance results are generally periodic
measurements of developments that occur during a
given time period like return on investment,
profits after taxes, earnings per share and market
share. Current performance results are compared
with the current objectives and with that of the
previous year’s performance results.
• If the results are equal to or greater than the
current objectives and past year’s results, the
company will mostly continue with the current
strategy otherwise, the strategy formulation
process begins in earnest.
• The strategic managers must evaluate the mission,
objectives and policies.
• In fact, the strategic managers are evaluated in
terms of management style, values and skills by
the top management.
• Henry Mintzberg has pointed out that a

15. Strategic Formulation
• 4 Important Subjective Aspects:
• Culture,
• Politics,
• Leadership, and
• Managerial Bias.
• Strategy formulation is as much an art as it is a science. In
fact, it is the art of strategy formulation that drives fast
growth and catapults a firm into newer horizons.
• Leaders should develop skills and capabilities to sense early
opportunities and be quick in making strategic moves. :The
successes of Airtel and Bharti Enterprises in India, and Google
and Southwest airlines abroad, are some examples.
• Cavin Kare, the Chennai- based FMCG company has moved from a
personal care product company into a major FMCG over the years
because of the bold strategic initiatives that it undertook.
• Similarly, snacks maker Haldirams has established its brand in
the food segment with a range of ready-to-eat food items from
ethnic India.

16. Modes of strategy formulation
include:
• Entrepreneurial Mode: Strategy is formulated by one
powerful individual. The focus is on opportunities
rather than on problems. Strategy is guided by the
founder’s own visions of direction.
• Adaptive Mode: This strategy formulation mode is
characterized by reactive solutions to existing
problems rather than a proactive search for new
opportunities.
• Planning Mode: Analysts assume main responsibility
for strategy formulation. Strategic planning
includes both the proactive search for new
opportunities and the reactive solution of existing
problems.
• Strategic factors

17. Adaptive search
• An adaptive approach to strategy is a way of
thinking about strategy that emphasizes
experimentation and adjustment in unpredictable
environments, rather than long-term planning
and analysis. It's based on the idea of
temporary advantage over time, rather than
sustainable competitive advantage. Adaptive
strategies can help businesses:

18. Intuition search
• An intuitive approach is based on feelings rather
than facts or proof. It's the ability to understand
or know something through instincts, emotions, or
"gut feelings" instead of rational thought or
examining facts. Intuition can be a common process
among people that's fed by subconscious information,
images, impressions, and sensations the brain
absorbs constantly. An intuitive approach is based
on feelings rather than facts or proof. It's the
ability to understand or know something through
instincts, emotions, or "gut feelings" instead of
rational thought or examining facts.
• In fact, intuition is the ability to have a grasp on
a situation or information without the comfort of
data analysis. It is like the leap of faith.
• In business, people may use intuition when facts are

19. Strategic factors
• The strategic factor approach to strategy
formulation is based on the different factors
that are important for an organization to
achieve its goals and objectives. These factors
can vary across different functions of the
organization, such as finance, marketing, and
operations.

20. • Strategic niche management (SNM) is a research
method that aims to create and nurture niches
for sustainable innovations through real-life
experiments. The goal is to trigger wider
systemic transitions by stimulating co-
evolution processes through experiments with
new technologies and socio-technical
arrangements.