Briefly, here are some ways in which the strategic planning process differs from the management control process. A strategic plan usually relates to some part of the organization lather than to the totality; the concept of a master planner who constantly helps all part of the organization at some coordinated optimum is a nice concept an unrealistic one. Strategic planning is essentially irregular problems, opportunities, and bright ideas do not arise according to some- set timetable; rather, they are dealt with whenever they happen to be; perceived. The appropriate analytical techniques depend on the nature of the problem being analyzed, and no over all approach (such as a mathematical model) has been developed that is of much help in analyzing all types of strategic, problems emphasis on a systematic approach is quite likely to stifle the essential element of creativity. In strategic planning, management, works, now on one problem, then Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
A New Business Strategy: Familiarity Matrix
Roberts and Berry devised a technique for selecting optimum diversification action plans for firms wishing to enter new product-markets called the familiarity matrix. It helps strategists decide which product-markets to enter and how. Its two axes, familiarity with market factors and technology or service, are both divided into three values: Base, new familiar, and new unfamiliar. The market dimension refers to the amount of knowledge possessed by the diversifying company of various characteristics of the market and the competitors within it. The authors distinguish between the newness of, and the familiarity with, the market for a product-service. Newness of a market is the extent to which the company has previously targeted it. Markets with which the company has prior experience, conceivably by selling old or existing products in it, are called base markets. Markets with which no such prior exposure exists are called new. Whether a new product is base Continue reading
Strategic Management Process – Stages of the Strategic Management Process
The strategic management process aims at delineating the organization’s strategy. It is defined as the process by which managers make a choice of a set of strategies for the organization to achieve efficient functioning and higher accomplishments. It is a continuous process that appraises the business and industries where organization is involved, evaluates its competitors, defines targets to meet all the present and future challenges and finally assesses each strategy periodically. Strategic management is a particular course of action that is meant to achieve a corporate goal. By and large, the owners, founders of the company take the first step of the process. They lay down the structure responsible for carrying out several functions such as providing direction and guidance to the employees, setting up measurable goals with defined time spans and designated duties. Planning, budgeting, acquiring resources, maintaining resources and using follow-up techniques to resolve key issues are key Continue reading
Top 3 Strategy Development Tools in Business
In the business world, strategy refers to the models using to make the right decisions that help organizations achieve set targets. It is, therefore, important that business people invest in understanding the various strategy development tools, their benefits, and their limitations. Having in-depth knowledge about strategy and how to select the right strategy tools, can businesses become more efficient and productive. There are several strategy development tools for use in the business world; what’s important is to know which strategy tool to use in a given circumstance. The main goal of using business strategy tools is to implement strategic plans in companies and help create economic moats. Some of the standard strategy development tools are; PESTEL, Five Forces, Resource-Based View, Cross Impact Analysis, and SWOT Analysis. In this article, only three important strategy development tools will be discussed. These strategy tools include; PESTEL, Five Forces, and SWOT Analysis. PESTEL analysis Continue reading
Organizational Downsizing – Definition and Reasons
Organizational downsizing is the conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness. Downsizing is being regarded by management as one of the preferred routes to turning around declining organizations, cutting cost and improving organizational performance most often as a cost-cutting measure. Main Reasons for Organizational Downsizing Corporate downsizing has been the biggest fallout of the troubled times, the world is witnessing. As we continue our efforts to fight the global downturn, downsizing has become a stark reality. There are a number of reasons why a company downsizes its employee base. Merging of two or more firms: When a certain firm combines its operations with another firm and operates as a single entity, in order to stay in profit or expand the market reach, it is called a merger. In case of a merger, certain positions become redundant. The same work is done by two Continue reading
Steps implemented by Companies Act with regard to Corporate Governance
The Ministry of Company Affairs appointed various committees on the subject of corporate governance which lead to the amendment of the companies Act in 2000. These amendments aimed at increasing transparency and accountabilities of the Board of Directors in the management of the company, thereby ensuring good corporate governance. The dealt with the following: 1. COMPLIANCE WITH ACCOUNTING STANDARDS — SECTION 210A As per this subsection inserted by the Companies Act, every profit and loss account and balance sheet of the company shall comply with the accounting standards. The compliance of Indian Accounting standards was made mandatory and the provisions for setting up of National Committee on accounting standards were incorporated in the Act. 2. INVESTORS EDUCATION AND PROTECTION FUND — SECTION 205C This section was inserted by the Companies Act 1999which provides that the central government shall establish a fund called the Investor Education and protection Continue reading