Page 9 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 1: Introduction to Strategic Management

Though this definition is simple, it does not consist of all the elements and does not capture the Notes
essence of strategic management.
The definitions of Fred R. David, Pearce and Robinson, Johnson and Sholes and Dell, Lumpkin
and Taylor are some of the definitions of recent origin. Taken together, these definitions capture
three main elements that go to the heart of strategic management. The three on-going processes
are strategic analysis, strategic formulation and strategic implementation. These three
components parallel the processes of analysis, decisions and actions. That is, strategic
management is basically concerned with:
l. Analysis of strategic goals (vision, mission and objectives) along with the analysis of the
external and internal environment of the organisation.
2. Decisions about two basic questions:
(a) What businesses should we compete in?
(b) How should we compete in those businesses to implement strategies?

3. Actions to implement strategies. This requires leaders to allocate the necessary resources
and to design the organisation to bring the intended strategies to reality. This also involves
evaluation and control to ensure that the strategies are effectively implemented.
The real strategic challenge to managers is to decide on strategies that provide competitive
advantage which can be sustained over time. This is the essence of strategic management, and
Dess, Lumpkin and Taylor have rightly captured this element in their definition.

1.2 Nature of Strategic Management

Strategic Management can be defined as the art & science of formulating, implementing, and
evaluating, cross-functional decisions that enable an organisation to achieve its objectives.
Strategic management is different in nature from other aspects of management. An individual
manager is most often required to deal with problems of operational nature. He generally
focuses on day-to-day problems such as the efficient production of goods, the management of a
sales force, the monitoring of financial performance or the design of some new system that will
improve the level of customer service.

!
Caution These are all very important tasks. But they are essentially concerned with
effectively managing resources already deployed, within the context of an existing strategy.
In other words, operational control is what managers are involved in most of their time.
It is vital to the effective implementation of strategy, but it is not the same as strategic
management.

Strategic management involves elements geared toward a firm's long term survival and
achievement of management goals. The components of the content of a strategy making process
include a desirable future, resource allocation, management of the firm-environment and a
competitive business ethics. However, some conflicts may result in defining the content of
strategy such as differences in interaction patterns among associates, inadequacy of available
resources and conflicts between the firm's objectives and its environment.

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