DEFINITION
"a decision about how to use available resources to secure a major objective in the face of possible obstructions......such as competitors, public opinion, legal status, taboos and similar forces".
(Koontz and O'Donnell)
Strategy implies action as well as decision-making and involves consideration of the environment in which it operates. The term "corporate strategy" relates to strategy applied by organisations of all types, both private and public, and of all sizes both large and small.
The Need for Strategic Planning
1. Management of an organisation may be described as achieving given objectives through the efforts of other people, and so strategic management is concerned with the establishment of a medium- to long-term strategy by top management within an organisation.
2. Corporate strategy is that which is undertaken on behalf of a corporation, as opposed to that of an individual; although we all adopt strategies on our own behalf as we pursue what Black adder's assistant Baldrick would refer to as "a cunning plan".
3. In order to achieve corporate objectives a strategic plan has to be established. This identifies each major element so that provision can be made for it within the overall plan. Without this planning those who are responsible for the activities which must be carried out in order to achieve the objectives, i.e. the operational or tactical managers, are unable to select the necessary tactics.
4. Provided there is a strategic plan set up by top management there is no need for tactical managers to be fully informed of its detail; all they have to do is develop trust in senior managers so that they follow out their instructions.
5. Managers at all levels in an organisation have some responsibility for involvement beyond the task they currently have in hand. The more senior the manager, the broader this responsibility is and the further forward in time it extends.
Approaches to Strategy
Strategic planning has been recognised in the last 40 years or so as a necessary topic for managers to study. Strategic Management , This movement was largely due to Hofer and Schendel who showed how the strategic management approach evolved from the policy formulation and the "initial-strategy" approach
of the 1960s.
1. The policy formulation approach established the need for managers to create rules which set the parameters within which a functional area exists, and define what the functional area can and cannot do.
2. The initial-strategy approach was defined by Chandler (1962) as being the determination of long-term goals and objectives for an organisation, and the setting up of the necessary courses of action too achieve these, together with the allocation of resources necessary for this.
0 Comments