Purpose and content of
A strategy is an organisation‘s long-
term plan of action designed to achieve its mission and goals in the face of competition and environmental change. Strategy answers three questions: Where are we going? How do we get there? What resources do we need? Five Stages of Strategic Management Process • Stage 1 — VISION & MISSION: Define what the organisation stands for, its purpose, and long-term aspiration • Stage 2 — EXTERNAL ANALYSIS: Analyse the external environment (PESTLE, Porter’s Five Forces) — Opportunitiesand Threats • Stage 3 — INTERNAL ANALYSIS: Analyse internal capabilities (Value Chain, VRIO, resource analysis) — Strengths and Weaknesses • Stage 4 — STRATEGY FORMULATION: Create strategies at corporate, business, and functional levels based on SWOT • Stage 5 — STRATEGY IMPLEMENTATION: Execute the chosen strategy through structure, people, resources, culture, and systems • Stage 6 — STRATEGIC EVALUATION & CONTROL: Monitor results, compare with targets, take corrective action
The Balanced Scorecard (BSC) was developed by Robert Kaplan and David Norton in 1992 at Harvard Business School. It is a strategic measurement and management framework that evaluates organisational performance from four perspectives, balancing financial and non-financial measures. The value chain (Porter, 1985) disaggregates a firm into strategically relevant activities to understand costs and differentiation. Managers must decide which activities to keep in-house and which to outsource.
Strategic control evaluates whether the overall strategy is appropriate, whether the assumptions underlying the strategy remain valid, and whether the organisation is achieving its long-term strategic goals. • Focuses on long-term performance (years, not months) • Examines whether strategic direction is still correct • Involves senior management and board • Questions to answer: Is our chosen competitive strategy still working? Have our assumptions about the market changed? Are we achieving our 5-year goals? BBA 6th Sem – Strategic Management | CSJMU Kanpur Page 25 • Harder to measure — strategic success is complex and multidimensional
Operational control monitors day-to-day performance to ensure that specific operational tasks are completed efficiently and effectively, in line with the strategy. • Focuses on short-term performance (daily, weekly, monthly) • Examines whether specific tasks and programmes are being executed as planned • Involves middle and operational managers • Questions: Are we meeting this month’s production target? Is our inventory within planned levels? Are customer service standards being met today? • Easier to measure — operational metrics are specific and quantifiable
Six Sigma is a data-driven quality management methodology that seeks to eliminate defects and reduce variation in processes. The goal is to achieve 3.4 defects per million opportunities — near-perfection. Developed by Motorola in 1987; popularised by GE under Jack Welch in the 1990s. Sigma (σ) is a statistical measure of variation. 6 sigma = only 3.4 defects per 1,000,000 opportunities — extremely high quality.
TQM is a management philosophy and set of practices that focuses on continuously improving quality throughout the organisation — in all products, services, and processes — to meet or exceed customer expectations. 4.1 Core Principles of TQM • Customer focus: the ultimate judge of quality is the customer • Total employee involvement: every employee is responsible for quality • Process-centred: quality is built into processes, not inspected at the end • Integrated system: all functions must work together for quality • Strategic approach: quality improvement must be a long-term strategic goal • Continual improvement (Kaizen): small, ongoing improvements accumulate into major gains • Fact-based decision making: use data and metrics, not intuition • Communication: clear, open communication at all levels
Corporate culture is the shared system of values, beliefs, norms, traditions, and practices that define the character of an organisation and govern how its people behave. It is ‘the way we do things around here’ — visible in actions, decisions, language, and symbols. An adaptive culture is one where the organisation and its members embrace change and proactively respond to shifts in the environment. In today’s VUCA (Volatile, Uncertain, Complex, Ambiguous) world, adaptive cultures are a strategic necessity.
Steps in the Strategic Control Process ,The strategic control process follows a systematic cycle of setting standards, measuring performance, analysing variances, and taking action. Step 1: Establish Performance Standards • Set clear, measurable targets derived from the strategic and operational plans • Standards can be quantitative (sales targets, profit margins) or qualitative (customer satisfaction level) • Standards must be achievable yet challenging — they set the baseline for evaluation Step 2: Measure Actual Performance • Collect data on actual results through formal reporting systems • Sources: financial reports, sales data, production statistics, customer feedback, employee performance reviews • Measurement frequency: daily (operations), monthly (finances), quarterly (strategy) Step 3: Compare Performance Against Standards • Calculate the variance:
Actual – Standard = Variance • Determine if the variance is favourable (actual > standard)
Or unfavourable (actual < standard) • Apply the principle of exception: focus management attention only on significant variances Step 4: Analyse the Causes of Variance • Distinguish between controllable variances (internal) and uncontrollable variances (external) • Use root cause analysis tools (5 Whys, Fishbone diagram) • Determine whether the variance is a one-time occurrence or a systemic issue Step 5: Take Corrective Action • If the variance is controllable: adjust processes, resources, or behaviours • If the strategy itself is flawed: revise the strategy (strategic reformulation) • If the standard was unrealistic: revise the standard • Document lessons learned for future planning cycles
Strategic Management Process ,The strategic management process is a full cycle of activities that organisations follow to achieve long-term success. It consists of five interrelated stages: Stage 1: Developing a Strategic Vision & Mission • Vision defines where the organisation wants to be in the future • Mission defines the present scope of the business — what it does, for whom, and how • Together they provide direction and purpose to all strategic decisions Stage 2: Setting Objectives • Converts the vision/mission into specific, measurable performance targets • Short-term objectives: quarterly/annual milestones • Long-term objectives: 3–5 year targets (market share, revenue, innovation) Stage 3: Crafting a Strategy • Strategy is crafted at four levels: Corporate, Business, Functional, Operational • Uses frameworks like SWOT, BCG Matrix, Ansoff Matrix, Porter’s Generic Strategies • Goal: build sustainable competitive advantage Stage 4: Implementing and Executing the Strategy • Translating strategy into specific action plans with deadlines and responsibilities • Requires resource allocation, structural changes, people motivation • The most resource-intensive and time-consuming stage
Stage 5: Monitoring, Evaluating, and Adjusting • Tracking actual performance against strategic targets • Taking corrective action if performance deviates • Strategy is dynamic — adjustments are a natural part of the process