Strategic Management

1
Session 1
History and Overview of Strategic Management
2
Session Objectives

• To Develop an Understanding of the (brief)
  History of Strategic Management.
• To Develop a Conceptual Understanding of the
  Paradigm Shift from Business Policy to Strategic
  Management

3
Word for the Day

• Paradigm

4
Ford Foundation Study During Late 40s

• Need to develop a multi-disciplinary
  understanding of Business
• Ergo a capstone course that introduces
  accountants to marketing, marketers to
  operations, production managers to human
  resources
• Efficiency oriented given pent up demand form WWII

5
Multi-Disciplinary

• Integrative with input from an understanding of
  the interworkings of finance, accounting,
  marketing, research and development, human
  resources, operations, information management,
• These are the functional specialties that
  contribute to the general management of the firm.
• You have studied these fundamentals separately.

6
Whats Missing in this Paradigm?

• The effectiveness issue
• Focuses on doing things right but not whether the
  business is doing the right thing
• The entrepreneurial aspect of the business
• Must start with the health of the key idea

7
What is the First Strategy for any Business?

• Its that Key Idea in the Entrepreneurs mind for
• Satisfying a societal/marketplace need by
• Providing/producing a product/service that will
• Yield an excess of price over cost of its
  provision that
• Incents the provider to continue/expand its
  delivery
• (Capitalism 101)

8

• WHAT IS THE LIFE EXPECTANCY OF THESE KEY IDEAS?
• LONGER OR SHORTER TODAY THAN DURING THE MID 20TH
  CENTURY?

9

• A MORE RATIONAL
• PARADIGM WOULD BEGIN BY CONSIDERING THE HEALTH
  OF THE BUSINESSS KEY IDEA OR KEY IDEAS
• THATS STRATEGIC MANAGEMENT

10
What is Strategic Management?
The set of decisions and actions that result in
the formulation and implementation of plans
designed to achieve a companys objectives.
11
What is Strategy?

• Large-scale, future-oriented plan for interacting
  with competitive environment to achieve
  objectives
• Companys game plan
• Framework for managerial decisions

12

• SO WE WILL NOT TOTALLY ABANDON THE NOTION OF
  BUSINESS POLICIES THEY ARE IMPORTANT
• BUT WE WILL NOT CONSIDER POLICIES (WHICH WE WILL
  COME TO REFER TO AS FUNCTIONAL STRATEGIES/POLICIES
  ) UNTIL WEVE ESTABLISHED THAT WE ARE DOING THE
  RIGHT THINGS
• EFFECTIVENESS BEFORE EFFICIENCY