STRATEGIC MANAGEMENT
-Tarak Bahadur K.C., PhD
-Santosh Koirala
Session Outline
2
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

Strategy - concept
Strategic thinking
Strategic management
framework
Fore Thought
3

Battles are won long before they are
fought.
Anonymous
Strategy
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Exercise
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Strategy:Your Definition
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Strategy
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- is a plan / tactics / scheme one
adopts to get something done
under conditions of uncertainty.
 - is a method or plan chosen to
bring about a desired future, such
as achievement of a goal or
solution to a problem.
- is an action oriented plan of operation for achieving desired
goals based on situation analysis, and emphasises what an
organisation will be doing in future.
- is the answer to the question “How”?
Strategies are simply a set of actions that enable an
organisation to achieve results.




5 Ps of Strategy – H Mintzberg
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Plan
Perspective
Strategy
Position
Ploy
Pattern
Strategy …
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
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PLAN
o Consciously intended course of action, a set of guidelines
to deal with the situation
PLOY
o Specific maneuver intended to outwit an opponent or
competitor
PATTERN
o In a stream of actions…consistency in behavior whether
or not intended
POSITION
o Means of locating an organization in an environment
PERSPECTIVE
o An engrained way of perceiving the world
Strategy
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Managerial Intent
1. Logical incremental
2. Rational command
2. Cultural / Political Process
1.
1. Strategy: A Managerial Intent
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
Logical incremental
o
o
o
o
o
o
Standardized planning procedures
Systematic data collection and
analysis
Constant environmental scanning
On going adjustment of strategy
Tentative commitment to strategy
Step by step small scale change
Strategy: A ….
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
Rational command
Senior managers determines and direct
strategy
o Strong vision or mission
o Definite and precise objectives
o Analysis and evaluation of environments
o Clear plans
o
2. Strategy: A Cultural/Political
Process
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
o
o
o
o
o
o
o
Muddling through
Managing conflicting interest groups
Powerful groups with control over critical
resources more likely to influence strategy
Standardized way of doing things
Routines and procedures embedded in
organizational strategy
Deeply rooted beliefs and assumptions
Strong resistance to change
Gradual adjustment to strategy
Strategy: A ….
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
Externally dependent
o
o
o
o
o
Strategy is imposed by external forces
(e.g. legislation, parent organization)
Freedom of choice severely restricted
Groups dealing with the environment
have greater influence over strategy
Political activity within organization and
between environment likely
Externally driven strategy
- Johnson & Scholes
Strategic Thinking
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Strategic Thinking- Development
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Impact
Fundamental
and
sustained
Strategic Thinking
Strategic
Core Enabler
Management
Integrated Systems
Strategic
Planning
Methods
Limited
1960s
Time
Self Assessment
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Assess your strategic
thinking abilities
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
Time 10 minutes
Scoring
Use the following table to interpret your score.
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104–125 Exceptional: You’re a talented strategic thinker who possesses
many of the traits, behaviors, attitudes, and cognitive capacities
that are necessary for thinking strategically.
78–103 Superior: You’re a highly effective strategic thinker in many
areas but would benefit from refining some of your skills.
51–77 Adequate: You know and practice many of the basics of
strategic thinking. However, you can increase your success by
further extending your skills.
25–50 Deficient: You’ll need to work broadly on your strategic thinking
skills so that you can learn how to analyze opportunities and
problems from a broad perspective and understand an action's
potential impact on others.
Strategic Thinking
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
Strategic thinking means asking “Are we
doing the right thing?” Precisely, it means
making that assessment using three key
requirements about strategic thinking:
o A definite purpose be in mind;
o An understanding of the environment,
particularly of the forces that affect the
fulfillment of purpose;
o Creativity in developing effective
responses to those forces.
Strategic Thinking
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Strategic Thinking - Level
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Strategic Management
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



… is the application of strategic thinking to the job of
leading an organisation.
“Managing strategically”, in other words:
o ‘Diagnosing situation strategically’, and
o ‘Applying knowledge strategically’
…is the application of strategic thinking to the job of
leading an organisation.
“… is continuous, iterative process aimed at keeping an
organization as a whole appropriately matched to its
environment.”
-

Certo and Peter
… Is an ongoing process and involving a series of steps
to be followed.
Strategic Plan
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In order to determine where we are going,
where we stand, then determine where we want
to go and how we will get there. The resulting
document is SP for performance improvement to
achieve desired goals.
 A living document that has ability to create
successful future of the organization NOT large
document with detailed plans created arduously
over months at great effort and abandoned
after they have been duly acknowledged and
then filed away.

Strategic Planning
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

… is an organization's process of defining its strategy,
or direction, and making decisions on allocating its
resources to pursue strategy including its people and
capital.
… is a disciplined effort to produce fundamental
decisions and actions that shape and guide what an
organisation is, what it does, and why it does it with a
focus on the future. It is defined as the process of
addressing the following questions:
o Where are we? SWOT – Analysis
o Where do we want to be? – VMO
o How do we get there? – Strategy Formulation
Strategic Planning Process
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1.
2.
3.
4.
5.
Getting ready (agreement)
Environmental analysis (SWOT analysis)
Strategy Formulation (Identification of
Strategic Issues, Vision/Mission, Objectives,
Roles, Strategies)
Strategy Implementation (Strategic
Actions/Action plan- Tasks/Activities, By
whom, By when, Critical Success Factors, etc.)
Evaluation and Control
1. Getting Ready (Agreement)
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Assessing readiness
o Commitment of leadership
o Ability of leaders to devote necessary
attention to the ‘big picture’
 The purpose is to develop initial
agreement among key internal decision
makers about overall planning process for
their support and commitment

Steps in preparing for planning
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



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Obtain formal commitment
Select a strategic planning committee- a combination of
‘visionaries’ and ‘actionaries’ or a planning liaison to
spearhead the process, and clarify roles
Develop a work plan or a plan to plan that outlines who
is responsible for each outcome and time frames
Consider the adequate level of resources (money and
time) required for appropriate planning process
Identify the information that must be collected to help
make sound decisions
2. Environment Analysis
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Analysis and diagnosis of an
organization, often referred to as an
Organization Audit or SWOT analysis
 This is undertaken to assess an
organisation’s ability to deal with its
environment by identifying strengths,
weaknesses, opportunities and threats
(SWOT).

Internal Environment
Organisation / Supply side analysis
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An analysis of internal organizational factors
which reviews and investigates the prevailing
processes, resources and performance of
organization. The analysis identifies major
strengths and weaknesses - of all the key
functional elements (Structure, Functions, HR, Finance,
IT, Rules, Procedures, etc.).
What are major internal Strengths and
Weaknesses in terms of Structure, Resources,
Processes, Performance, Culture, etc. ?
External Environment
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Demand side analysis
Covers the various stakeholders outside the
organization. The analysis indicates the
opportunities and threats faced by the organisation
from its relationship with external stakeholders.
Major categories of external environment:
1. Forces and trends – PEST
2. Clients, customers, or payers
3. Actual or potential competitors or collaborators
What major external Opportunities and Threats
(Political, Economic, Social, Technology, Legal,
Stakeholders, etc.) do the organisation has?
SWOT Profile
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SWOT Profile- an example
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Internal
1.
2.
3.
4.
5.
Mandate / Vision /
Mission
Structure
Systems / Processes
Organizational resources
Performance / outputs
Strengths

External
Political
2. Economic
3. Social
4. Technological
1.
Trained staff
Weaknesses

Opportunities

Health sector as
one of the
priorities of
government
Weak
implementation
Threats

Self sufficiency
in resources
Considerations
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SWOT as very meaningful tool rather
than a causal ‘warm-up’ for strategy
formulation
 Use precise, verifiable statements ("Cost
advantage of Rs……/unit in sourcing
resources x", rather than "Good value for
money")- be specific

Considerations
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Reduce long lists of factors, and prioritize
them, so that you spend your time thinking
about the most significant factors.
 Make sure that options generated are
carried through to later stages in the
strategy formation process.

Considerations
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Apply it at the right level - for example,
we might need to apply SWOT Analysis
at service-line level, rather than at the
much vaguer whole organization level.
 Use it in conjunction with other strategy
tools (e.g. Core Competence Analysis) so
that you get a comprehensive picture of
the situation you're dealing with.

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Exercise: SWOT Analysis
3. Strategy Formulation
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
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The formulation of strategy is best described as a process for
developing a sense of direction and ensuring strategic fit. The outcome
of which is a formal written statement that provides a definitive guide
to the organization’s intentions.
Identifying Strategic Issues- fundamental policy question/choice which
affects an organization’s mandate, goals, programs, management
processes, organization structure, culture, etc.
Vision/Mission, Objectives, Roles, Strategies
An effective strategy is:
o Technically workable
o Politically acceptable to key stakeholders
o Accords with the organization’s philosophies and values
o Ethical and legal
o Deals with the issues supposed to address
Approaches to strategy
formulation
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Whittington (1993) has identified four approaches to the
formulation of strategy:
1. Classical – as a rational process of deliberate calculation.
2.
Evolutionary – as an evolutionary process that is a product of
market forces in which the most efficient and productive
organizations win through.
3.
Processual – strategy formulation as an incremental process that
evolves through discussion and disagreement.
4.
Systemic – strategy is shaped by the social system in which it is
embedded. Choices are constrained by the cultural and institutional
interests of a broader society rather than the limitations of those
attempting to formulate corporate strategy.
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



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Considerations in Formulating
Strategy
Organisational competence and
resources to capture opportunities
Environmental threats to its longterm well being
Personal values and aspirations of
managers
Societal obligations and ethical
considerations
Organisational culture
Strategic Plan
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Resources
Objective Strategy Measures/ Target
Initiatives
Indicators
What Who When
Improve
health
service
Increase
number
of
health
professi
onals
Decreased 10 %
Doctorby
Patient
2017
ratio
Increa
se the
numb
er of
stude
nts /
seats
MoH 2014
P,
Pvt.
Sect
or
Budget,
Infrastruct
ure, RP
Critical
Success
Factors
MoF,
Availabilit
y of RP,
Involvemen
t of Pvt.
Sector,
Govt.
policy
4. Strategy Implementation
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For effective implementation, it
needs to be translated into more
detailed policies that can be
understood at the functional level
of the organization.
4. Strategy Implementation
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
However beautiful
the strategy, you
should occasionally
look at the results.
- Winston Churchill
For effective implementation, it needs
to be translated into more detailed
policies that can be understood at the
functional level of the organization.
A General Framework for Strategy
Implementation
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o
o
o
o
o
o
Building an organisation structure to the
requirements of the strategy
Allocating resources and energies on
accomplishment of the strategic goals
Ensuring organisation-wide commitment
Installing administrative support system
Shaping the organisation culture to fit
the strategy
Exerting strategic leadership
Basic Approaches to Strategy
Implementation
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I.
II.
III.
IV.
V.
Commander Approach
Organisational Change Approach
Collaborative Approach
Cultural Approach
Crescive Approach
I. Commander Approach



Manager determines “best” strategy
Manager uses power to see strategy
implemented
Three conditions must be met:
1. Manager must have power
2. Accurate and timely information is
available
3. No personal biases should be present
II. Organisational Change
Approach




Focuses on the organisation
Includes
focusing
on
the
organisation’s
staffing
and
structure
Often
more
effective
than
commander
Used to implement difficult
strategies
III. Collaborative Approach




Enlarges the organisational
change approach
Manager is a coordinator
Management team members
provide input
Group wisdom is the goal
IV. Cultural Approach



Includes lower levels of the
organisation
Breaks down barriers between
management
and
other
employees
Everyone has input into the
formulation and implementation
of strategies
V. Crescive Approach
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


Moves upward from the "doers“
and lower middle-level
managers
The top management team
shapes the employees' premises
“Strategy" becomes the sum of
all successful approaches
5. Evaluation and Control
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The implementation of the strategy must be
monitored and adjustments made as needed.
Evaluation and control consists:
I. Defining parameters to be measured
II. Defining target values for those
parameters
III. Performing measurements
IV. Comparing measured results to the predefined standard
V. Making necessary changes
WHY STRATEGIC INITIATIVES FAIL?
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SI will fail when one is STUPID:
Sponsorship not forthcoming
Team member do not function as agents
of change
Unclear vision and commitment
Poorly planned change programme
Inappropriate/ Insufficient Communication
Don’t take account of culture
The SUCCESS Principle
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Shared vision
Understand the organization
Cultural alignment
Communication
Experience help where necessary / Executive
support
Strong leadership
Stakeholder buy-in / Systematic planning /
Short-term wins
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The story continues…
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