Strategic management

The word ‘strategy’ is derived from a Greek word
‘strategos’, which means generalship----the actual
direction of military force
Strategy is a plan or course of action or a set of
decision rules making a pattern or creating a
common thread
Strategy is the pattern or common thread related
to the organization’s activities which are derived
from the policies, objectives & goals
Strategy is related to pursuing those activities
which move an organization from its current
position to a desired future state
Strategy is the means to achieve objectives
A strategy is a long-term plan of action
designed to achieve a particular goal
Strategy applies to many disparate fields such
as: Military Strategy, Economic Strategy,
Environmental Strategy, Corporate Strategy,
Expansion, Retrenchment, Merger &
Acquisition Strategy etc.
Strategy includes the determination &
evaluation of alternative paths to an already
established mission or objectives & eventually
choosing the right alternative
Strategies are specific actions suggested to
achieve the objectives
Strategies are action oriented
Everyone is empowered to implement the
Strategies are concerned with uncertainties
with competitive situation like risk etc. which
are likely to take place at a future date
Strategy is deployed to mobilize the available
resources in the best interest of the company
It is the dynamic process of formulation,
implementation, evaluation & control of
strategies to realize the organization’s strategic
It is the set of decisions & actions resulting in
formulation, implementation of strategies
designed to achieve the objectives & goals of an
The Strategic management approach emphasizes
interaction by managers at all levels of the
organization at hierarchy in planning &
Strategies formulation activities enhance the
problem prevention capabilities of the
Gaps & overlaps in activities among diverse
individuals & groups should be reduced because
of the participation in strategy formulation
Resistance to change should also be reduced
Strategic decision making is the primary task of the
senior management
Most people agree that decision making is the
process of selecting a course of action from among
many alternatives.
The process is as follows----Objectives to be achieved are determined
Alternative ways of achieving the objectives are
Each alternative is evaluated in terms of its
objective-achieving ability &
The best alternative is chosen
Criteria for Decision Making: There are three
major viewpoints regarding setting criteria for
decision-making--Concept of Maximization:
It is based on the thinking of economists who
consider objectives as those attributes which
are set at the highest point.
The behaviour of the firm is oriented towards
achieving these objectives &, in the process,
maximizing its returns
Concept of Satisficing: This envisages setting
objectives in such a manner that the firm can
achieve them realistically, through a process of
Concept of Incrementalism:
According to this, the behaviour of the firm is
complex & the process of decision making , which
includes objective setting, is essentially a
continually – evolving political consensus
Through such an approach, the firm moves
towards its objectives in small, logical &
incremental steps
2. Rationality in Decision Making: It means
exercising a choice from among various alternative
courses of action in such a way that it leads to the
achievement of objectives in the best possible
3. Creativity in Decision Making:
 To be creative, a decision must be original &
different .
 A creative strategic decision-making process may
considerably affect the search for alternatives
where novel & untried means may be looked for &
adopted to achieve objectives in an exceptional
Variability in Decision Making:
Given an identical set of conditions, two
decision makers may reach totally different
This happens due to variability in decision
It suggests that every situation is unique &
there are no set formulas that can be applied in
strategic decision making
5. Person-related Factors in Decision-making:
 There are a host of person related factors that play
a role in decision making, such as- age, knowledge,
intelligence, risk-taking ability & creativity
6. Individual vs Group Decision–making:
 Owing to person related factors, there are
individual differences among decision maker.
 As organizations become bigger & more complex
& face an increasingly turbulent environment,
individuals come together in groups for the
purpose of strategic decision making.