Strategic

Management
Objectives:
- By the end of this lecture all participant should be able to:

 Identify the concept of management, strategy, and strategic

management.

 List importance of strategic management.

 List features of strategic management.

 Discuss levels of strategic management.

 Explain process of strategic management.

 Explain strategy implementation.

 Explain strategy implementation process.

 Discuss role of top management.

 Discuss role of board of directors.

 Outlines
1. Introduction

2. Definitions of Management/Strategy/Strategic management

3. Definition of planning

4. Types of planning (short term- intermediate- long term/strategic)

5. Importance of strategic management

6. Features/ characteristics of successful strategic management

7. Principles of strategic management

8. components of strategic management

9. Advantages & disadvantages of strategic management

10. Level of strategic management

11. Process of strategic management

12. Strategy implementation

13. Role of top management in strategic management

14. Role of the board of directors

15. Obstacles/Barriers to effective strategic management

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16. References

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 Introduction
Strategic management is the formulation and implementation of the
major goals and initiatives taken by top management based on resources and
an assessment of the internal and external environments in which the
organization competes. Strategic Management is all about the identification
and description of the strategies that managers can carry so as to achieve
better performance and a competitive advantage for their organization.
Definitions:
Management
Is a process by which manager create, direct, maintain, and operate
purposes of organization through using human resources? Also,
management refers to work that involves the guidance or direction of a
group of individuals toward organizational goals or objective’s. Is the
process by which a cooperative group directs action towards common goals?

 Strategy
A strategy is an action plan built to achieve a specific goal or set of
goals within a definite time while operating in an organizational framework.

Strategic management
Strategic management is the set of managerial decisions and actions
that determines the long-run performance of a corporation. It includes
environmental scanning (both external and internal), strategy formulation,
strategy implementation and evaluation and control therefore it emphasizes
the monitoring and evaluating of external opportunities and threat in the
light of corporation’s strengths and weakness.
Strategic management can also be defined as a bundle of decisions
and acts which a manager undertakes and which decides the result of the
firm’s performance. The manager must have a thorough knowledge and

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analysis of the general and competitive organizational environment so as to
take right decisions.

Definition of planning
Planning can be defined as "thinking in advance what is to be done, when it is to
be done, how it is to be done and by whom it should be done and what time
.needed to be done

1. Types of planning (short term- intermediate- long term/strategic)

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Strategic Plans
Strategic plans define the framework of the organization’s vision and how the
organization intends to make its vision a reality.
 It is the determination of the long-term objectives (5-15 years) of an
enterprise, the action plan to be adopted and the resources to be mobilized
to achieve these goals.
 Since it is planning the direction of the organization’s progress, it is done
by the top management of an organization.
 It essentially focuses on planning for the coming years to take the
organization from where it stands today to where it intends to be.
 The strategic plan must be forward-looking, effective, and flexible, with a
focus on accommodating future growth.
 These plans provide the framework and direction for lower level planning.

Tactical Plans
Tactical plans describe the tactics that the managers plan to adopt to achieve the
objectives set in the strategic plan.
 Tactical plans span a short time frame (usually less than 3 years) and are
usually developed by middle level managers.

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  It details specific means or action plans to implement the strategic plan by
units within each division.
 Tactical plans entail detailing resource and work allocation among the
subunits within each division.

Operational Plans
Operational plans are short-term (less than a year) plans developed to create specific
action steps that support the strategic and tactical plans.
 They are developed by first line manager fulfill his or her job
responsibilities and to support tactical plans.
 the day-to-day operations of an organization.
 Operational plans can be Drawn to cover issues that managers face
repeatedly, e.g. policies, procedures, rules

Importance of strategic management:

 Strategic management is important because its helps in setting detailed
goals, analyzing all internal and external resources, analyzing external
environment as well as stakeholder views.

 Strategies are established to set direction, focus effort, define or clarify

the organization, and provide consistency or guidance in response to the
environment.

 To understand the direction of organization is going and how this will be

accomplished.

 To know the message of organization.

 By planning the steps to the goals, employees are given a clear direction
of what is expected and the reasons why. This allows employees to
accomplish their jobs more efficiently and ultimately helps organizations
achieve their long-term objectives.

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 To determine goals and achieve them, organizations using strategic
management perform an analysis of their strengths, weaknesses,
opportunities and threats (SWOT). This analysis helps organizations
understand conditions in their current environment and turn weaknesses
into strengths and threats into opportunities.

Features of successful strategic management

1. Has support of organization’s executive officer.
2. Is user friendly.
3. Is participatory, not left to planners.
4. Is flexible.
5. Leads to resources decisions.
6. Engages and motivates all staff.
7. Is fresh and continuous, not static and stale.
8. Is proactive
9. Not a quick fix
10. Part of quality management
11. Payoffs increase over time

Characteristics of Strategic Management

Objective oriented
The process is carried out with the aim and objective of evaluating the
different elements through SWOT analysis and other methods and designing
a plan or strategy that enables the organization to maneuver around every
hurdle and make use of its strength.

Future-oriented

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 Strategic decisions are future-oriented. They are made on the basis of
predictions and projections. They are concerned with the long-term direction
and scope of the organization.

Availability and allocation of resources

Resource availability helps teams complete a project on time and use
.only the resources needed to achieve each goal

Influence of Environment
the environment shapes the various strategic decisions that executives
make as they attempt to lead their organizations to success . It is important to
analyze the environment in order to achieve the Strategic Management goals

Universal applicability
The strategic management plan is Capable of being applied universally and
is relevant or appropriate in any place.

Levels of strategy
In Strategic Management all the levels must be clear and explained

Review
A strategy review is a process in which organizations discuss the
progress of their goals and objectives and make the necessary adjustments
for the upcoming year.
Classification of strategy
Classification must be will define and clear

Participants in Strategic Management

Board of Directors

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 Board of directors of a company, being the trustee of share- holders’
property, is directly answerable to-4hem. Thus, board should be directly
involved in strategic evaluation and control

CEOS

The chief executive of an organization is responsible for overall

performance. Therefore, his role is quite crucial in strategic evaluation- and
control. Though he is not involved in evaluation of routine performance which
is left to other managers, he focalizes his attention on critical variations
between planned and actual.

Corporate Planning Staff

Undertakes facilitating Functions for the smooth performance of Strategic

Management Functions.

Other Managers

Besides board of directors and chief executive, other managers are also
involved in strategic evaluation and control. These are finance managers, SBU
managers, and middle-level managers

Consultants

Independent units which are engaged, in providing professional service by

specially trained and experienced persons to advise and assist the managers and
administrators They provide assistance to different areas of Management in
Strategic Decision Making.

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Components of strategic management, and why each component is
needed for success:
§ Environmental Scanning
§ Strategy Formulation
§ Strategy Implementation
§ Strategy Evaluation

The main components of strategic management include environmental

scanning, strategy formulation, strategy implementation, and strategy
evaluation and control. Environmental scanning is very important because it
provides a basis for the company to collect, scrutinize, and provide
appropriate information needed for various strategic purposes. It enables a
company to analyze various internal and external factors that will influence
its operation. This component makes use of tools such as PEST (Political,
Economic, Socio-cultural, and Political) and SWOT (Strengths, Weaknesses,
Opportunities, and Threats) analysis. After environmental analysis, the
management evaluates the information on a continuous basis in a bid to
improve it. Thus, strategy evaluation becomes the second component.
Strategy evaluation involves the determination of the best course of action
which is meant to accomplish.

Advantages of Strategic Management

1. Financial Benefits
2. Improved Quality of Strategic Decisions.
3. Better Employee Incentives.
4. Reduced Gaps and Overlaps.
5. Less Reluctance to Change.
6. Ensure Success.
7. Encourages Innovation and creativity.
8. Competitive Advantage

1-Financial Benefits Impact of Strategic Management is Improved financial

performance in terms of profits
2- Improved Quality of Strategic Decisions. through group interaction. The
process of group interaction for decision making helps in Generating
Alternative Strategies. Better Screening of Options

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3-Better Employee Incentives. Participation of Employees or their
Representatives.
Leads to a better understanding of the Priorities.
Subsequent Rewards.
4-Reduced Gaps and Overlaps. ...
in activities of employees.
Better understanding of the Roles & Responsibilities Identification of clear
role by the Employees
acceptability of change.
All-inclusive Process
Better understanding & Limits of the available alternatives
6-Ensure Success.
Survival
To Achieve success in VUCA world
7-Encourages Innovation and creativity.
New ways of doing things.
While Planning
8-Competitive Advantage. Improves the competitive position of the
Organization Optimum use of its Competencies & Resources Keeps it on the
right track.

Disadvantages of Strategic Management

1. Costly or Expensive
2. Resistance to change
3. Complex and dynamic environment
4. Not suitable for small scale organizations.
5. Lack of Expertise and Information.
6. Lack of Flexibility.
7. No match in strategy formulation and strategy implementation
8. Lack of Commitment

1-Costly or Expensive

*Gathering of Information
*Testing of Various course of action involves greater amount of money.
The utility derived from this process is sometimes less than the expenditure
incurred
In terms of time.
The time devoted to it by managers.
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Managers cannot ignore theirs Operational Responsibilities.
Because the consequent losses may be irreparable

2-Resistance to change.

As experienced everywhere. reluctance to accept changes

3-Complex and Dynamic Environment

Besides internal factors, there are external factors that may adversely affect
them.
*Political * Economic *Social, etc.

4-Not suitable for small scale organizations. Sometimes the expenses are
so prohibitive that small organizations cannot afford

5-Lack of Expertise and Information

for proper SWOT Analysis....

May lead to wrong and ineffective Strategies

6-Lack of Flexibility

Whole Approach is very Rigid

7-No match in Strategy Formulation and Strategy Implementation

There is a wide gap between Strategic Formulation and its actual

Implementation.
* Framed at Top Level
* Implemented at the Middle Level and Lower level

8-Lack of Commitment

Main reason for the failure of Strategies

Levels of strategic management:

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1. Corporate: one of the specifies what organization is in or wants to be in
and what it wants to do with those businesses.

 This level of strategy is only necessary when the company operates in

two or more business areas through different business units with
different business-level strategies that need to be aligned to form an
internally

2. business: is a strategy for how an organization will compete in its

business.

 the business-level strategy is aimed at gaining a competitive

advantage by offering true value for customers.

3. Functional: which are the strategies used by an organization’s various

functional departments to support the competitive strategy.

 should implement a functional level strategy to achieve its own

goals, enhance operations, and support the wider business level
strategy.

Other Types of strategic management

1. The first group is normative: It consists of the schools of informal

design and conception, the formal planning, and analytical positioning.

2. The second group: It consists of six schools, is more concerned with

how strategic management is actually done, rather than prescribing
optimal plans or positions. The six schools are entrepreneurial, visionary,
cognitive, learning/adaptive/emergent, negotiation, corporate culture and
business environment.

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3. The third group: It consists of one school, the configuration or
transformation school, a hybrid of the other schools organized into
stages, organizational life cycles or episodes.

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Strategic management Road Map:

Process of strategic management:

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 Stages of strategic management

1. Goal-Setting:

The purpose of goal-setting is to clarify the vision for organization

business. This stage consists of identifying two key facets:

 First, define both short and long term objectives.

 Second, identify the process of how to accomplish objective.

2. Analysis:

Is a key stage because the information gained in this stage will shape
the next two stages. In this stage, gather much information and data relevant
to accomplishing vision.

3. Strategy formulation:

This step of forming a strategy through determine what resources the

business currently has that can help reach the defined goals and objectives.
Identify any areas of which the business must seek external resources.

4. Strategy implementation:

Successful strategy implementation is critical to the success of the

business venture. This is the action stage of the strategic management
process.

5. Evaluation and control:

Strategy evaluation and control actions include performance

measurements, consistent review of internal and external issues and making
corrective actions when necessary.

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 Strategy implementation
Strategy implementation refers to the execution of the plans and
strategies to accomplish the long-term goals of the organization. It converts
the opted strategy into the moves and actions of the organization to achieve
the objectives.
Strategy implementation is the technique through which the firm
develops, utilizes and integrates its structure, culture, resources, people and
control system to follow the strategies to have the edge over other
competitors in the market.
Strategy implementation is the fourth stage of the strategic
management process, the other three being a determination of strategic
mission, vision and objectives, environmental and organizational analysis,
and formulating the strategy. It is followed by strategic evaluation and
control.

Process of strategy implementation

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1. Building an organization those possess the capability to put the strategies
into action successfully.

2. Supplying resources in sufficient quantity to strategy-essential activities.

3. Developing policies which encourage strategy.

4. Such policies and programs are employed which helps in continuous

improvement.

5. Combining the reward structure for achieving the results.

6. Using strategic leadership.

The process of strategy implementation has an important role to play

in the organization success. The process takes places after environmental
scanning, SWOT analysis and ascertaining the strategic issues.

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 Strategic management Plan
Goal: Facing competition with different surrounding hospitals.

Objective: Improve hospital ranking and level of care provided by it.

Strategy Conduct consistent meeting and continuous evaluate all
.hospital employee performance
Purpose - To enhancing hospital care and its classification with
different surrounding hospitals.
Target completion date -Depended on activity of all hospital employees and health
care staff and their commitment with hospital rules and
quality standards.
Active fiscal year/funding Operating budget
Action plan -Provide high quality of patient care and improve patient
satisfaction.
-Improve educational level of all hospital employees and
health care staff.`
-Start to take actions and process to involved hospital with
national accreditation agency.
Measure of success -All hospital employees and health care staff become aware
about importance of competition with different surrounding
hospitals and its effect on all hospital.
Strategy sponsor .Hospital owner and top management

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 Role of top management
Principles associated with the function of planning
Of all the top management roles and responsibilities, planning is one
of the most important. In fact, every other business activity is borne out of
planning, either directly or indirectly, because it is based on policies and
strategies that were predetermined during planning.
Planning isn’t something you do once and then forget it. Ideally, it is
something you want to do continuously, so that you avoid wasting time.
When organization meets the objectives associated with a specific plan that
plan ends there, and a new one must take its place to further guide the
organization.
Implementation: The process of planning is delicate in the sense that
it means nothing without implementation. As much as possible a business
should try to avoid drafting plans that cannot be implemented because they
are impractical or unrealistic. To be effective the process of planning should
not only be ambitious, but also rational and realistic.
Transparency: A good business is transparent about the plans it
makes. The members of the organization including top-level management,
the employees, and the shareholders should be made aware of the plans of
the business. The same holds for major external stakeholders of the business.
This transparency ensures that everyone is in the loop and therefore can
work towards achieving the objectives of the business.
Sustainability: There are two types of plans: long-term plans and
short-term plans. For both long-term and short-term plans to work, they
should be sustainable. They shouldn't give rise to self-generated hurdles;
instead, they should enable the organization to achieve its goals.
Principles associated with the function of organizing
Every organization, no matter how large, will have some common
goal or goals that it aspires to. There will, however, be smaller goals for the

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different branches and departments of the organization. These goals should
ultimately only be there to lead the organization to achieve its main
objectives.
Coordination: Each department should have coordination within
itself in order to achieve its goals. However, there should also be
coordination between different departments so that they work to achieve the
common goals of the organization. The idea is that the business should
function like one large machine with the different parts working in harmony.
The lack of coordination ultimately leads the business to deviate from its
goals.
Balance: For the business’s activities to run smoothly each
department should have balance with itself and there should also be balance
between the departments. Within a department no single employee should be
under-worked or overworked. Neither should any department end up doing
more than its fair share of work.

Uniformity: The organization should deliver its activities in a manner

that is uniform. When there is no system for running things, then there is
bound to be a lack of efficiency and the organization is likely to be
hampered in its efforts to achieve its goals.
Efficiency: The organization should not only achieve its goals but
should seek to do that in the most cost-effective manner possible. Part of that
is making sure every employee enjoys job satisfaction in order to encourage
them to be as productive as possible.
Principles associated with the function of direction
Maximum individual contribution: A good manager should be able
to direct his or her employees such that each employee does their best. The
management style should, therefore, be focused on the individual. Only by
doing this can the top level manager reap the most benefit out of every
individual employee.
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 Appropriateness of direction technique: There are lots of different
types of direction. The most important ones include individual awareness,
leadership, encouragement, and motivation. This principle, however is all
about using the right type of direction for a given situation.
Leadership: This is all about the leadership technique of direction.
Leadership is a skill that all top-level managers should have in spades.
Arguably, it is the most important direction technique there is; typically, it
guarantees the best results. A group of people who are working toward a
common goal will need a leader which will enable the group to function
properly.
Following through: Not only is it important to direct employees and
tell them what to do, it is also important that they follow the directions. This
will tell the top-level manager whether or not their direction technique was
effective.

Principles associated with the function of coordination

Continuity: Coordination like planning is a continuous process. In
any organization something is being coordinated. In fact usually a lot of
things are being coordinated at the same time. This continuity ensures that
everything is working smoothly and that every business has a need for the
process.
Early beginning: A business should seek to start the coordination
process in the early stages of policy-making and planning. If this important
process isn’t emphasized early enough then it will be difficult to emphasize
during the execution stage.
Direct contact: A business can achieve coordination most effectively
by fostering direct interpersonal relationships. This isn’t only the vertical
relationships between seniors and juniors but also horizontal relationships
among team members. When direct contact is involved in the coordination

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process, employees are more likely to agree on actions, methods and
accomplishments.
Principles associated with the function of control
Flexible controls: The limits that an organization sets should not be
extreme. Just like a rubber band an organization should be able to withstand
stress and strain by being more flexible. Rigidity and control can lead to
negative results.
Exceptions: There is no such thing as a rule without an exception.
Every rule should be flexible. Flexibility should not be seen as loopholes but
as relief from the extremity of a rule. If a plan is too rigid, then it's probably
an unrealistic plan. Exceptions are an important part of controlling not only
business activities, but also employees.
Action: To effectively control an organization should be able to check
that the activities do not deviate from the goals of that organization. A top-
level manager should know which actions to take in case anything goes
wrong.

Role of the board of directors

Establish vision, mission and values
 Determine the organization vision and mission to guide and set the pace
for its current operations and future development.
 Determine the values to be promoted throughout the organization.
 Determine and review organization goals.
 Determine organization policies

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Set strategy and structure
 Review and evaluate present and future opportunities, threats and risks in
the external environment and current and future strengths, weaknesses
and risks relating to the organization.
 Determine strategic options, select those to be pursued, and decide the
means to implement and support them.
 Determine the business strategies and plans that underpin the corporate
strategy.
 Ensure that organizational structure and capability are appropriate for
implementing the chosen strategies.
Delegate to management
 Delegate authority to management, and monitor and evaluate the
implementation of policies, strategies and business plans.
 Determine monitoring criteria to be used by the board.
 Ensure that internal controls are effective.
 Communicate with senior management.
Exercise accountability to shareholders and be responsible to relevant
stakeholders
 Ensure that communications both to and from shareholders and relevant
stakeholders are effective.
 Understand and take into account the interests of shareholders and
relevant stakeholders.
 Monitor relations with shareholders and relevant stakeholders by
gathering and evaluation of appropriate information.
 Promote the goodwill and support of shareholders and relevant
stakeholders.

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behavior for high performance people management. San Diego, CA:
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Kipley, D. (2013): OSPP – The optimal strategic performance positioning

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(1.0).
Kipley, D., & Jewe, R. (2016): Effective strategic management: From
analysis to implementation (2nd ed.). San Diego. CA: Cognella,
Publishing.

Leroy, H., Anseel, F., Gardner, W. L., & Sels, L. (2015): Authentic
leadership, authentic followership, basic need satisfaction, and work
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1677-1697.

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Podsakoff, N.P., Podsakoff, P.M., MacKenzie, S.B., Maynes, T.D., &
Spoelma, T.M. (2014): Consequences of unit-level organizational
citizenship behaviors: A review and recommendations for future
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Rapp, A.A., Bachrach, D.G., & Rapp, T.L. (2013): The influence of time
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Applied Psychology, 98, 668-677.

Wallace, J.C., Butts, M.M., Johnson, P.D., Stevens, F.G., & Smith, M.B.
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