CHAPTER 1INTRODUCTION
1.1. Nature of Strategic Management
Strategic management, at its core, embodies the essence of organizational leadershipin a rapidly evolving business environment. Understanding the nature of strategicmanagement involves delving into its fundamental characteristics that set it apart as adynamic and integral aspect of organizational functioning.1.1.1. Future-Oriented PerspectiveStrategic management is inherently future-oriented, emphasizing the significance of long-term planning and foresight. It involves anticipating and responding to changes in theexternal environment, market trends, and competitive landscapes. Organizations engaging instrategic management seek to position themselves advantageously in the future, makingdecisions today that will yield sustainable success tomorrow.1.1.2. Holistic and Integrated ApproachStrategic management is not a standalone activity but a comprehensive and integrated process. It permeates through all levels of an organization, aligning various functions anddepartments towards common goals. From top leadership to operational staff, everyone playsa role in the strategic management process. This integrated approach ensures that the entireorganization works cohesively towards a shared vision and mission.1.1.3.Continuous and Adaptive ProcessUnlike static planning, strategic management is a continuous and adaptive process. Itrecognizes the dynamic nature of the business environment and necessitates a constant cycle1
of planning, implementation, and evaluation. Organizations engaging in strategicmanagement are agile, ready to adjust strategies based on evolving circumstances andfeedback. This adaptability is critical for survival and competitiveness in an ever-changingmarketplace.1.1.4.Multifunctional and Multilevel ActivityStrategic management is not confined to a single department or level within anorganization. Instead, it is a multifunctional and multilevel activity that involves the active participation of leaders, managers, and employees across various departments. It integratesdiverse perspectives and expertise, ensuring that strategic decisions consider the broadspectrum of organizational capabilities and challenges.1.1.5.Proactive OrientationA proactive orientation is a hallmark of strategic management. Instead of merelyreacting to external forces, organizations practicing strategic management actively shapetheir future. This proactive stance involves seizing opportunities, mitigating risks, andcreating a favorable competitive position. Strategic management empowers organizations to be architects of their destiny rather than passive observers of market dynamics.
1.2. Understanding the Strategic-Management Process
In the dynamic and competitive landscape of business, strategic management plays a pivotal role in guiding organizations towards success. It involves a systematic andcomprehensive approach that encompasses three crucial stages: strategy formulation,implementation, and evaluation. This chapter explores the intricacies of these stages, sheddinglight on the strategic-management process that is essential for organizational survival andgrowth.2
1.3. The Three Pillars of Strategy: Formulation, Implementation, and Evaluation
Effective strategic management unfolds in three interconnected phases: strategyformulation, implementation, and evaluation. Each stage demands careful consideration anddeliberation. Strategy formulation involves the development of long-term goals and objectives,crafting a viable strategy to achieve them. Implementation is the execution phase where plans are put into action. Finally, evaluation involves assessing the outcomes and making necessaryadjustments. This chapter delves into the significance of each stage, unraveling the complexitiesof creating and sustaining a successful strategic plan.
1.4.
Balancing Analysis and Intuition: The Art and Science of Strategic Management
Strategic decision-making is a delicate balance between rigorous analysis and insightfulintuition. The need for integrating both facets is paramount in navigating the uncertainties of the business environment. While analysis provides data-driven insights, intuition allows for anuanced understanding of complex situations. This chapter explores why the fusion of analysisand intuition is crucial in strategic management, illustrating how successful leaders leverage bothto make informed and agile decisions.As we embark on the exploration of strategic management concepts and cases, it becomesevident that a holistic understanding of the strategic-management model, the benefits it offers,and the potential pitfalls is essential for managers and leaders aiming to steer their organizationstowards sustained success.3
CHAPTER 2 LITERATURE REVIEW
2.1.Definition of Strategy
Strategy refers to a comprehensive plan of action designed to achieve a specific goal. Itinvolves making choices and allocating resources to attain a competitive advantage. Strategy isimportant because the resources available to achieve goals are usually limited. Strategy generallyinvolves setting goals and priorities, determining actions to achieve the goals, and mobilizingresources to execute the actions. A strategy describes how the ends (goals) will be achieved bythe means (resources). Strategy can be intended or can emerge as a pattern of activity as theorganization adapts to its environment or competes. It involves activities such as strategic planning and strategic thinking.Henry Mintzberg from McGill University defined strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning, while Henrik von Scheel defines theessence of strategy as the activities to deliver a unique mix of value – choosing to performactivities differently or to perform different activities than rivals. while Max McKeown (2011)argues that "strategy is about shaping the future" and is the human attempt to get to "desirableends with available means". Vladimir Kvint defines strategy as "a system of finding,formulating, and developing a doctrine that will ensure long-term success if followed faithfully."
2.2.Definition of Strategic Management
Strategic management is the art and science of making decisions that shape the directionof an organization. It involves formulating, implementing, and evaluating strategies to achievelong-term objectives. Strategic management provides overall direction to an enterprise andinvolves specifying the organization's objectives, developing policies and plans to achieve those4