Page 18 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes 1.8 Summary

Strategic or institutional management is the conduct of drafting, implementing and
evaluating cross-functional decisions that will enable an organisation to achieve its long-
term objectives.
It is a level of managerial activity under setting goals and over tactics.
It is the process of specifying the organisation's mission, vision and objectives, developing
policies and plans, often in terms of projects and programs, which are designed to achieve
these objectives, and then allocating resources to implement the policies and plans, projects
and programs.
Strategic management provides overall direction to the enterprise and is closely related
to the field of Organisation Studies.
Although a sense of direction is important, it can also stifle creativity, especially if it is
rigidly enforced. In an uncertain and ambiguous world, fluidity can be more important
than a finely tuned strategic compass.
When a strategy becomes internalized into a corporate culture, it can lead to group think.
It can also cause an organisation to define itself too narrowly.
Even the most talented manager would no doubt agree that "comprehensive analysis is
impossible" for complex problems.
Formulation and implementation of strategy must thus occur side-by-side rather than
sequentially, because strategies are built on assumptions which, in the absence of perfect
knowledge, will never be perfectly correct.
The essence of being "strategic" thus lies in a capacity for "intelligent trial-and error" rather
than linear adherence to finally honed and detailed strategic plans.

Strategic management is a question of interpreting, and continuously reinterpreting, the
possibilities presented by shifting circumstances for advancing an organisation's objectives.

1.9 Keywords

Environmental Analysis: Evaluation of the possible or probable effects of external as well as
internal forces and conditions on an organisation's survival and growth strategies.
Financial Benefits: profits associated with strategic management
Multifunctional Consequences: having complex implications on most of the functions of the
organisation
Non-financial Benefits: intangible benefits associated with strategic management
Non-Self Generative Decisions: decisions that are taken infrequently but promptly when needed
at any point of time
Plan: A set of intended actions, through which one expects to achieve a goal.
Strategic Choice: choice of course of action given the environment, mission and capabilities

Strategic Management: stream of decisions and actions that lead to development of effective
strategy
Strategy: A plan of action designed to achieve a particular goal.

Tactic: A conceptual action taken under a well defined strategy to achieve a specific objective.

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