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Strategic management Page 1 II BBA -STRATEGIC MANAGEMENT UNIT 1: The business system- Objectives of the business- Setting up and balancing the objectives mission- Vision-goals strategic analysis of functional areas production- marketing-Human resources-finance- Analysing corporate capabilities.

BUSINESS SYSTEM: Meaning: Business is an economic activity ,which is related with continuous and regular production and distribution of goods and services for satisfying human want under uncertain market conditions.

Definition: According to Lewis H.

Haneyproducing or acquiring Objectives of Business: Survival : ¾ It will continue the business concern into the future as long possible strategic managers take more responsibility for survival of the organisation business. ¾ Survival is basic and implied objectives of the most organisations.

Stability: ¾ Stability is the one of the important objectives of the business enterprises. ¾ A good and steady enterprise always minimises is managerial tensions and reduce is dynamic nature decisions.

Growth: ¾ Growth refers to overall development of the organisation activities in terms of increase in assets , manufacturing facilities increase in sales volume new product to improve profits and market share.

Profitability : ¾ Profitability is the vital role of a business organisation. ¾ Profit is the sole motive of the business enter price. Strategic management Page 2 Productivity: ¾ Productivity objectives are sometimes stated in terms of desired goals achieve by company. ¾ This is an equally effective way to increase profitability. ¾ Strategic managers try to improve the productivity of their companies.

Efficiency: ¾ Efficiency helps to business to achieve goals and success of the business. ¾ Efficiency refers to best utilisation of available and scarce resources and brings the highest productivity in business activities.

Competitive position: ¾ It can increase profitability and productivity of the company . ¾ Companies or firms or organisation competitive position reduce the cost of production of the output.

Employee development: ¾ It refers to be experienced employees of the organisation. ¾ Company employees will need training for further course of action effectively and efficiently managed to produce productivity in competitive position and market.

Employee Relationship: ¾ All companies actively good employees have committed relations with organisational environment. ¾ Strategic managers take a decision to welfare programme for the employees of the companies. ¾ It can improve the employees relationship in the organisation.

Technological leadership: ¾ It gives clear picture of the organisation goals and objectives for the long term changes in the business scenario. ¾ Many companies state their objectives in terms of their technological leadership. Strategic management Page 3 Importance of Business: ¾ Improvement in standard of living: Business helps people in general to improve their standard of living. ¾ Proper utilisation of resources: It leads to effective utilisation of the scarce resources of society.

It provides facility of mass production. ¾ Better quality and large variety of goods and services: It involves production. Purchase and sale of goods, and services for price.

Customer satisfaction is the backbone of modern business. ¾ Creates utilities: Business makes goods more useful to satisfy human wants .It adds to products the utilities of person, time, place, form, knowledge, etc. ¾ Employment opportunities: It provides employment opportunities to large number of people in society. ¾ Workers welfare: Organisations these days take care of various welfare activities for workers.

Setting up and Balancing the objectives: The hierarchy of strategic intent include the following elements: A.

A broad vision of the organisation. B. C.

The strategic goals and specific objectives. Vision: A vision statement is permanent statement of a company. vision is future aspirations that lead to an inspiration.

A vision statement focuses on tomorrow and what an organisation want to ultimately become. vision Mission Goals Objectives Strategic management Page 4 Definition: According to Kotler defines vision as is a description of an enterprise. an organisation, corporate culture, a business ,a tec Process of Formulating Vision: 1.Understand the organisation: To formulate a vision of an organisation, strategic leader first must understand it. 2.Conduct a vision Audit: This step involves assessing the current direction and momentum of the organisation. 3.Target the vision: This step involves starting to narrow in on a vision. 4.Set the vision context: vision is a desirable future for the organisation.

To craft that vision he must think about organisations future environment. 5.Develop future scenarios: This step follows directly from the fourth step.

Most impact on vision, combine, those expectations in to a futures strategic marketer anticipate.

The scenarios should represent in the aggregate, the alternative futures the organisation to operate. 6.Generate alternative visions: There are several alternative futures for the environment ,there are several directions the organisation might take in the future.

The purpose of this step is to generate visions reflecting those different directions. 7.choose the final vision: The decision point strategic leader selects the best possible vision for organisation.

The final vision should best meets the criteria of a good vision compatible with the organisations culture, and values and applies to a broad range of alternative scenarios possible futures.

Benefits of vision: ¾ Good visions are inspiring and exhilarating. ¾ Good visions are competitive , original and unique. ¾ Good visions long term thinking. understand the organisation Set the context Conduct vision audit Target vision Develop future scenarios generate alternative visions choose the final vision Strategic management Page 5 ¾ Good vision integrity can be used for the benefits of people. Mission : A mission of a company is expressed in terms of products and geographical scope.

It includes a methodology of attaining the desired goal in vision.

It defines the competitive strength of a company and it emanates from corporate vision and strategic posture of a company.

Definition: According to hunger and wheelen, is the purpose or Process of Formulating mission: Key decision makers policy Visionary long term concept Organisational mission 1.Philosophy: ¾ Philosophy in the organisation of management of an organisation, consists of an organisation consists of an integrated set of assumptions and beliefs. ¾ These assumptions and beliefs create an organisation(owners) and those managers the decision makers become base for defining vision of the organisation. 2.Vision: ¾ Vision of an organisation has a long-term orientation and i