Strategic Management CA IPCC...By Santosh Baliga *Based on ICAI material. SB Professional Coaching 3...

By Santosh Baliga *Based on ICAI material.

1 SB Professional Coaching

Strategic Management – CA IPCC

Chapter 1 – Business Environment

❖ What is Business?

➢ It is State of being busy.

➢ One’s Regular occupation

➢ Forms of business can be entity, corporation or company.

➢ Every business has different functions performed such as Purchase, Sales, Manufacture etc.

❖ Discuss Profit as an business objective as per Peter F. Drucker

Profit in every business means:

➢ Reward for risk taking

➢ An Financial yardstick (measurement) to measure success

➢ Higher the efficiency higher the profit

➢ In present times business cannot be held in explained only in terms of profit

➢ other factors are also considered such as

▪ Development of wealth;

▪ Non-financial factors such as Goodwill, societal factors, CSR etc.

❖ Profit may not be a universal objective but business efficiency is definitely an objective

common to all business.

➢ True: Organizations pursue multiple objectives rather than single objective in which

business efficiency is very useful operational objective.

➢ Various other important objectives pursued by business relate to survival, stability, growth,

Technological dynamism, financial solvency, diversification, employee satisfaction, welfare

and above all and most critical is to create and retain customer and provide them

satisfaction.

➢ All organizations aim for optimum utilization of resources and economy in operational costs.

❖ The basic objective of a business enterprise is to monitor the environment - Incorrect.

❖ Can a business succeed in the long run by focusing only on profit as its primary objective?

❖ What are key objectives of business? Or

How would you analyze the meaning and importance of objectives of business? (SS GEP)

➢ Survival: (E.g. Air India, Nirma, BSNL etc. )

▪ Basic and implicit objective.

▪ Important during initial stages and economic recession or slowdowns.

▪ It depends on following factors

• Nature of business

• Nature of ownership

• Nature of management

• Financial strength of the enterprise (e.g. if the group co. is Reliance in case of Jio)



➢ Stability: (E.g. Hero Motors Ltd.)

▪ Cautious and conservation approach/objective;

▪ Least resistance in a hostile environment

▪ Minimizes the risk of management failure ( as cautious approach not much risk taken)

▪ It promotes smooth workflow & better efficiency.

➢ Growth: (E.g. Pepsi, Pizza Hut, Dominoes etc.)

▪ Most popular objective of all businesses.

▪ Associated with dynamism.

▪ Forms of growth may be:

• Increase in asset

• Increase in revenue

• Increase in profit

• New products introduced in new markets

• Inorganic growth such as Mergers and Acquisitions.

▪ Management in such case may take risks to achieve higher growth.

➢ Efficiency:

▪ Management rationally takes business decisions.

▪ Optimum utilization of resources at minimum possible cost

▪ An enterprise should efficient in selecting means to achieve the goal.

▪ It is one of operational objective.

➢ Profitability:

Same as Profit explanation written earlier. Refer the same.

❖ Business Environment:

➢ Business functions as a part of broader environment. It draws inputs such as human,

financial and other resources from environment and converts the resources through various

processes in to output of products and services.

Inputs resouces from environment

Converts these resources through various process

Output of products/ services



➢ Environment is sum of several external and internal surroundings :

➢ No one can live in an isolated vacuum; same is the case with business.

➢ Passive response to environment results in fade away of business (e.g. Nokia, Blackberry)

➢ Successful businesses identify, appraise and respond to various opportunities and threats in

its environment.

❖ A business, even if it is continually remains passive to the relevant changes in the environment

would still grow and flourish.

➢ Incorrect: Business functions within a whole broad environment and have to negotiate their

way through it. A successful business has to identify, appraise and respond to various

opportunities and threats in the environment. The extent to which the business achieves its

objectives would depend upon how it interacts with environmental situations or constraints.

A business remaining passive to changes (slow to react or does adapt to the environment) is

destined to gradually fade away (not survive).

❖ Environmental constituents exist in isolation and do not interact with each other. – Incorrect.

➢ Environmental constituents such as economic, legal, society, technology and other elements

are interwoven, interrelated and inter dependent through complex and haphazard linkages.

❖ There is both opportunity and challenges in changes happening in the environment. – Correct.

❖ What are the characteristics of Business environment?

Complex ❖ It is a collection of many factors, events, conditions and information. ❖ These are easy to understand in isolation or in parts but difficult to grasp

in totality. ❖ These do not exist in isolation, keep interacting among themselves and

create new influences

Dynamic ❖ Constantly changing ❖ Dynamism in business environment facilitates continuous change in its

shape & character.

Multi-Faceted ❖ Shape and character of business environment depends on perception of observer.

❖ A particular change or development can be viewed differently. ❖ It may be seen as threat of one and opportunity for other.

A far reaching impact

❖ Growth and profitability of an organization depends upon its environment.

❖ Change in environment may affect the business in several ways and impact the objectives of business.

Environment

Internal External



❖ What are the problems in understanding Business environment influences?

Complexity ❖ It is a collection of many factors, events, conditions and information, which are interwoven, interdependent and interacting with each other, making it too difficult to grasp.

❖ These do not exist in isolation, keep interacting among themselves and create new influences

Diversity ❖ Different influences difficult to predict. ❖ They are to be considered in totality and make sense of their linkages. ❖ To consider their impact on strategic decision making.

Uncertainty ❖ Technological change and speed of communication leads to fast changes in business environment.

❖ It becomes difficult to predict things in uncertainty.

Limitation of Managers (Human Behavior)

❖ Managers are no different from other individuals. ❖ Managers sometimes focus on things which are historically important

and base their decisions as per past experience. ❖ Strategic manager should break out oversimplication or biasness in

understanding the business environment.

❖ Framework to understand environmental influences:

Framework for understanding environmental influences.

❖ Understand the nature of organisations environment. ❖ Analyse how uncertain it is? Is it easy to understand? ❖ It will help in deciding the focus of organisation.

❖ Check what environmental influences are present in environment.

❖ Evaluation: (AIR) – Audit, Identify the effect of influences, Relate with latest trends/results.

❖ Focus on immediate environment which require immediate consideration.

❖ What is environmental scanning and explain its related factors?

Meaning ❖ Process through which organisation monitors its relevant environment. ❖ To identify opportunities& threats affecting their business. ❖ For taking strategic decisions.

Objectives ❖ Understanding the current and potential changes. ❖ Environmental scanning should provide inputs for strategic decision

making. ❖ Facilitate& foster strategic thinking

Related Factors ❖ Events - are certain and specific occurrence taking place in different environmental sectors. Events are certain happenings in the internal and external environment of the organization which can be observed and tracked.

❖ Trends – are the general tendencies or the courses of action along which events take place. It is a grouping of similar or related events that tends to move in a given direction. Trends suggest a pattern of change in a particular area.

❖ Issues – are current concerns that arise in response to events and trends.

❖ Expectations – are the demands made by interested groups in the light of their concern for issues.



❖ Need for environmental analysis/scanning on a continuous basis:

➢ Environmental analysis helps strategists to develop an early warning system to prevent

threats or to develop strategies which can turn a threat into firm’s advantage.

➢ The extent to which the events are anticipated will reflect the quality of managerial

decisions.

➢ Managers can also concentrate on few major events instead of dealing with all the

environmental influences.

Three basics goals of environmental analysis/scanning

❖ Analysis should provide understanding of current and potential changes taking place in environment.

❖ It should provide inputs for strategic decision making.

❖ It should facilitate and foster strategic thinking.

❖ Micro and Macro Environment:

Micro environment Macro environment Refers to forces which are very close to the company and affects its ability to do routine functions.

Refers to all forces that are part of larger periphery and distantly affect the organization.

Nature: Internal and controllable Nature: External and uncontrollable

Affects day to day operations Affects long term goals and strategies

Elements of micro environment are specific to the said business

Elements of Macro environment are general and affect the working of all firms in the industry.

❖ Components of Micro Environment (COSMIC):

Customers ❖ People who pay consideration to buy the goods and services of organisation.

❖ Organisation cannot survive without customers. ❖ The consumer occupies the central position in the marketing

environment. The marketer has to clearly monitor and analyse the changes in consumer tastes and preference.

❖ Business must study: Who are the customers? What benefits are they looking for? What are their buying partners?

Organization ❖ Organization consists of individual they come from diverse and varied interest.

Suppliers ❖ Providers of materials, equipment, services. ❖ Only rely on suppliers to maintain the production. ❖ Can affect cost structure of the industry, with their bargaining power.

Market ❖ Can be studied in terms of potential size, growth and its attractiveness. ❖ Important issues: Cost structure, Price sensitivity, technological

structure, distribution system, market maturity.

Intermediaries ❖ They have considerable influence on the business organization.



❖ They have strong linkage with the customers, in some cases the consumer doesn’t even know the manufacturers of product they are buying.

Competitors ❖ Other business entities and compete for resources as well as markets. ❖ Few major Questions:

- Who are the competitors? - Their product & service offered. - Market share - Financial service - What will be their next move?

❖ Potential competitors.

❖ Elements of Macro environment:

I] Demographic environment:

▪ Characteristics of population in a region. Factors such as race, age, income and

educational levels etc.

▪ Such data is useful to the businessman and economists.

▪ Points to be studied:

• How will it affect the market size?

• How they represent opportunities or threat?

• What effect will they have on Strategic competitiveness of organization?

▪ Factors of interest to business:

Population Larger the population the better for business.

Geographic Company’s location and workforce availability

Income distribution

Leads to change in saving and consumption pattern which may give opportunities to the company.

Ethnic Mix Ethnic means culture. Organizations in today’s world have people coming in from different ethnic background. Organization must determine the impact of the change in ethnic mix on product design and delivery. It shall consider modifying the existing or introduce new product and service.

II] Economic environment:

▪ Determines the nature and direction of economy.

▪ General economic situation, condition which impact demand, supply, cost, availability,

reliability etc.

▪ Determines the strength & size of market.

▪ Purchasing power, current income, price, credit and debt availability.

▪ organization shall scan, monitor & forecast:

• Tax rates

• Interest rates

• Inflation rates

• Money market trends

• Stock market trends



III] Political – Legal environment:

▪ Level of politics, its morality, law and order situation, political stability, government

policies and enactments. Such factors can be of interest to a businessman and impact its

products and services.

▪ Factors to be considered:

Government 1. Policies (business oriented or otherwise) 2. Type of government (growth oriented or otherwise)

Legal 1. Business organization operates in the country in which there is sound legal system.

2. Good knowledge of laws required 3. Consider the changes in regulatory framework and its

impact on business. (e.g. GST)

Political 1. Political pressure group influence. 2. There may be political movements against the products

and organizations. 3. Impact of special interest groups such as Human rights

commission etc.

IV] Socio- Cultural environment:

▪ Mixture of factors such as social traditions, values and beliefs, level and standard of

literacy and education, ethical standards and state of society.

▪ The core beliefs and values of a particular society tend to be persistent.

▪ Important social factors:

• Social concerns (corruption , mass media)

• Social attitude (expectation of society from business)

• Family factors (structure and values)

• Role of women in society

• Education levels.

V} Technological environment:

▪ Technologies changed the way people communicated, travel, and do business.

▪ Technology & business are highly interrelated and interdependent.

▪ Both opportunity and threat and risk and uncertainty.

▪ Technology not only affects the product but the whole business.

▪ Factors to be considered:

• Technology required by enterprise.

• Technology used by enterprise.

• Additional technology required

• Sources of technology

• Role of technology

• Investment in technology.



❖ Global environment: ▪ Globalization refers to the process of integration of world into Hugh market.

▪ Such unification calls for removal of all trade barriers among countries.

▪ Economic reforms have promoted globalization.

▪ At company level globalization means

➢ Global industry specifically means an industry where a firm’s competitive position in one

country is affected by its position in other countries.

➢ Global industry is one that by operating in more than one country gains R&D, production,

marketing and financial advantage in its costs and reputation not available to purely

domestic competitors.

➢ Why do companies go global?

▪ Shrinking of time

▪ Inadequacy of domestic markets

▪ Exportation

▪ Cheaper source of raw materials

▪ Reduce high transportation cost

▪ To improve sales volume

Globalisation means

Company commits heavily with several

manufacturing location around the world

means the ability to compete in domestic markets with foreign

competitors

Attributes of global company

Conglomerate of multiple units located

at different parts of the globe but linked with common ownership

Multiple units draw a common pool of resources such as

money, credit, patents etc.

All Units respond to common strategy



❖ Strategic approach to Globalization:

Multi Domestic strategy

❖ In this strategy the organization focuses on competition within each country in which firm operate.

❖ Adopted when the company tries to achieve a high level of local responsiveness by matching their products and service offerings to national conditions prevailing in such countries.

❖ Organization attempts to customize their products and services according to local conditions. E.g. : Mcdonalds making burgers for local taste in India like paneer tikka burger etc.

Global Strategy ❖ This strategy assumes more standardization of products across country boundaries.

❖ Company tries to focus on low cost structure by leveraging their expertise.

❖ Competitive strategy is centralized and controlled by the home office.

Transnational Strategy ❖ It is a mixture of Multi Domestic and Global strategy. ❖ Difficult to implement.

❖ Competitive environment:

➢ The essence of strategy formulation is to cope with the competition.

➢ All organizations have competition. It affects the price and scale of operations

➢ Competition benefits the consumers, society and market.

➢ Competition maybe direct or indirect.

Things to be considered to understand nature and extent of competition:

▪ Who are the competitors?

▪ Their product and service

▪ Market share

▪ Financial position

▪ Cost and price advantage

▪ What will be their next move?

▪ Potential competitors

It varies from industry to industry.

❖ Cooperation in competitive environment: ▪ Instead of fighting, business groups work with each other even in the competitive

environment.

▪ Businesses cooperate with each other in order to maximize profit and minimize cost.



Cartelization ❖ Organizations dealing in the same product or services or sometimes in different products & services forms groups & cartels to rule the market.

❖ Same condition as OLIGOPOLY eg. OPEC ❖ Arrangement are either explicit or tacit ❖ Aims at safeguarding their interest individually or

collectively, stabilizing the market price & avoiding fluctuations.

Kieretsus ❖ Cooperation between loosely coupled groups of companies usually in related industries.

❖ Large cooperative networks of business. ❖ Formed in order to enhance the abilities of

individual member business to compete in their respective industries.

❖ Kieretsus members are peers and may have shareholders or board members in common.

❖ These members remain individual independent companies in their own right.

❖ Only strategy common is to prefer to do business with member company both when buying and selling.

Family owned cooperation ❖ Major and minor decision taken by family members.

❖ Disadvantage: - Quarrels & conflicts - Succession issues

❖ E.g. Tata, Birla, Escorts group companies etc.

Types of cooperation

Cartelization KieretsusFamily owned

business



❖ Porters five forces model: (Competitive Analysis)

❖ Explain the factors that affect the strength of competitive pressures from substitute

products?

1. Substitute products are a hidden source of competition in an industry. In many

cases they become a major constituent of competition.

2. Factors such as prices, easy availability, and how best they are able to satisfy the

needs of customers, determine the amount of competition through them.

3. Substitute products offering a price advantage and/or performance improvement

to the consumer can drastically alter the competitive character of an industry. And

They can bring it about all of a sudden. Wherever substantial investment in R&D is

taking place, threats from substitute products can be expected. Substitutes, too,

usually limit the prices and profits in an industry.

❖ Do you think that competition is always bad for organization? Explain Porters five

forces model as to how business can deal with the competition?

❖ PESTLE analysis:

➢ PESTLE analysis is used in analysis of macro environmental factors and not micro

environment. ➢ PESTLE analysis involve identification of below factors and their influence:

Organization

Bargaining power of customer

New Entrants

Bargaining Power of suppliers

Rivalry among current player

Threats from

substitutes



PESTLE analysis

Political Economic Socio-cultural Technological Legal Environmental



Chapter – 2 – Business policy and Strategic Management

❖ Business Policy:

➢ Meaning: Business policy is a study of:

▪ Functions and responsibilities of Senior management

▪ Crucial problems that affect success in the total enterprise and the decision that

determine the direction of organization.

▪ It represents the framework for understanding strategic decision making

▪ It enables a person to make preparations for handling general management

responsibilities.

▪ Business policy tends to emphasize on the rational-analytical aspect of strategic

management.

❖ Strategy:

➢ Strategy is game plan management is using to achieve below objectives:

▪ Take market position

▪ Conduct its operations

▪ Attract and satisfy customers

▪ Complete successfully

▪ Achieve organizational objectives

➢ According to William F Glueck”A unified, comprehensive, and integrated plan designed to

assure that the basic objectives of the enterprise is achieved.”

➢ Corporate strategies have distinct characteristics such as

▪ Long range

▪ Action oriented

▪ Multipronged

▪ Integrated

▪ Flexible and dynamic to cope with uncertainty.

➢ It is formulated at the top management level, they flow out of the goals and objectives of

the enterprise.

➢ Strategy provides an integral framework for management to negotiate its way through

complex and turbulent environment. – They provide a systematic basis for enterprise to

stand its ground in the face of challenges and change as also quickly to adjust to them. They

prevent the occasion for impulsive and crisis decisions, false starts, misdirected moves,

wasted resources etc.

➢ Strategy is partly proactive and partly reactive – Correct

➢ Strategies can never be perfect, flawless and optimal organizational plans. The very nature

of strategy is flexible and pragmatic.

➢ Strategy is no substitute for sound, alert and responsible management. A good

management at the top can steer an organization by adjusting its path on the basis of

changes in environment.



❖ Corporate Strategy:

➢ It is basically the growth design of the company;

➢ it spells out the growth objective of the company

▪ its direction, extent, pace, and timing

▪ the strategy to achieve the growth

➢ It is also known as the objective-strategy design of the company.

➢ Characteristics of corporate strategy: ▪ Long range in nature

▪ Action oriented

▪ Goal oriented

▪ Multipronged & integrated

▪ Flexible & dynamic

▪ Formulated at top management level

▪ Meant to cope up with competitive & complex setting

▪ Made to achieve the objectives of the organization

▪ Perceiving opportunities & threats

▪ Decision making

▪ Scynronised: Gives importance to combination, sequence, timing, direction.

❖ What does corporate strategy ensure?

▪ It ensures growth & correct alignment of the firm with the environment

▪ Serves as design for filling strategic planning gap

▪ Helps to build relevant competitive advantages

▪ Masterminding its external environment is the primary contribution

▪ Designed for filling the firm's strategic planning gap

▪ Ensuring that the right fit is achieved between the firm and markets

▪ Purpose of Corporate strategy is to harness the opportunities.

❖ Stages of corporate strategy formulation implementation process:

Developing a strategic vision Where the organization needs to head to, future products, Market, and technology.

Setting objective Using them as a yardstick for measurement of performance.

Crafting a strategy To achieve desired outcome

Implementing and executing Implementing the chosen strategy effectively and efficiently.

Monitoring developments Initiating adjustments in light of company’s: - Actual performance - Changing conditions - New ideas

- New opportunities.



❖ Competitive Strategy:

➢ It is a strategy designed to deal with existing and future competition in external

environment.

➢ Competitive strategy is affected by factors internal as well as external to the firm:

❖ Strategic Management:

➢ It is a combination of Strategy and Management.

➢ It refers to:

▪ Forming Strategic vision.

▪ Setting objectives.

▪ Developing a Strategy.

▪ Implementing and executing the strategy.

▪ Initiating whatever adjustments are required. Implementing corrective adjustments.

Internal factors

Companys strength and

weakness

Personal value of key

implementers

External factors

Industry's opportunities

& threats

Broader societal

expectations

Forming strategic

vision

Setting objectives

Develop Strategy

Implement and execute

strategy

Initiate & implement corrective

adjustment



❖ Overall objective of Strategic management:

❖ Basic framework of Strategic process:

❖ Major Stages of Strategic management process are:

➢ Develop vision and mission statement.

➢ Perform Internal and external audit.

➢ Establish long term objectives.

➢ Generate, evaluate and select strategies.

➢ Implement strategies considering management issues.

➢ Implement strategies – marketing, finance, accounting, R&D.

➢ Measure and evaluate performance.

Objectives of Strategic Management

To create competitive advantage so that company

can outperform the competitors to have

dominance over the market

To guide the company successfully through all

changes in the environment.

Stage 1

•Where are we now? Beginning

Stage 2

•Where we want to be? Ends

Stage 3

•How might we get there Means

Stage 4

•Which way is the best? Evaluation

Stage 5

•How can we ensure arrival? Control



❖ Importance/Benefits of Strategic Management:

➢ Helps organization to be more proactive than reactive.

➢ Provides guidance to entire organization and framework for all the major business decisions.

➢ Helps organization to identify the available opportunities and identify ways and means as

how to reach them.

➢ Serves as corporate defence mechanism against mistakes & pitfalls.

➢ Helps evolve certain core competencies & competitive advantages.

❖ Strategic Decision making:

Meaning of Strategic decision making

• It is managerial process and is a function of choosing a particular course of action.

•Decisons may relate to general day to day operations (major/minor).

•They also be strategic in nature.

•They are different in nature than all other decsions.

Major dimensions of Strategic Decision Making

•Strategic issues require top management decisions.

•Strategic issues involve the allocation of large amountsof company resources

•They are likely to have significant impact on firms long term prosperity.

•Strategic issues are future oriented.

•They have major multi functional consequences.

•Necessitate consideration of factors in the firms external environment.



❖ Strategic levels in an organization:

❖ Vision:

Meaning A strategic vision is a roadmap of company’s future providing specific focus on: ❖ Technology, Customer focus, Geographic and product markets to

be pursued; and

❖ Capabilities to plan to develop and the kind of company that management is trying to create.

How does a vision help

❖ A strategic vision steers an organization in particular direction and charts a strategic path for it to follow in preparing for the future and molds organization identity.

❖ All Strategies emerge from corporate vision. ❖ A strategic vision is a road map of company’s future. ❖ It provides a panoramic view of “where we are going” and

“where we want to be”. ❖ It is long-term in nature and must motivate and arouse

organization wide commitment.

Corporate Level

• CEO's, Sr. Executives, Corporate staff, BOD.

• To oversee the development of strategies

for whole organization.

• Defining mission and goals and what business it should be in.

• Allocating resources.

• Formulating and implementing strategies in individual business.

• Providing leadership for org.

• Link between people who oversee and those who own it.

Business level

•Concerned with

strategies specific to a particular business.

•Transalate general statement in to specific one.

Functional Level

•Responsible for the

specific business function or operation like HR, purchasing, Product development,Customer service etc.



❖ Three elements of vision:

❖ Developing a strategic vision:

- Coming up with mission statement and conveys a essence of "Who are we and where we are now"

- Using Mission Statement for deciding on a long term course making choice about "Where are we going"

- Communicating strategic vision with clarity, having exciting terms which arouse organisation wide committment.

Developing a strategic

vision

Think creatively

about how to prepare

company for future

It is an exercise of intelligent

entreprenuer-ship

Well articulated vision create

enthusiasm and engages

members of org.

Best worded vision statement clearly & crisply illuminates the

direction in which org. is

headed.



❖ Shared Vision V/s Vision Shared:

Shared Vision is better than Vision Shared. Comment.

Shared Vision Vision Shared ❖ When individuals are able to bring

organizations vision close to their hearts and minds it is said they have shared vision

❖ When the vision is imposed upon the individuals of the organization by the top management, then it is said to be vision shared.

❖ It is a force that creates a sense of commonality that permeates (fills) the organization and gives coherence (consistency) to diverse activities.

❖ It may demand compliance rather than commitment.

➢ For success of organizations having shared vision is better than vision shared.

➢ All strategies emerge from corporate vision.

▪ Vision explains where the organization is headed, so as to provide long-term direction,

delineate what kind of enterprise the company is trying to become and infuse the

organization with a sense of purpose. All strategies need to be drawn in the light of

corporate vision, which is what the firm ultimately wants to become.

❖ Mission Statement:

➢ What is mission?

▪ Typically focused on the present business scope.

▪ Should be precise, clear, feasible, and distinctive.

▪ Who we are & what we do?

▪ Describes organizations present capabilities, customer focus, activities and business

makeup.

▪ Expression of growth ambition of firm

▪ Grand design of firm’s future.

▪ Basis of expression of corporate’s vision.

▪ What businesses are we are in?

▪ Main purpose is to give direction for future of the corporate.

➢ Why should an organization have a mission?

▪ To ensure unanimity

▪ To provide basis for motivating the use of organization’s resources.

▪ To develop a basis or standard for allocating resources.

▪ To establish a general tone or organizational climate.

▪ To facilitate the translation of objective & goals into a work structure.

▪ To specify organizational purposes and the translation of these purposes in to goals in

such a way that cost, time and performance can be assessed and controlled.



➢ Which points should be kept in mind while writing mission?

▪ Mission gives an organization its own special identity.

▪ Distinguishes the organization from other similar companies.

▪ Technology, competencies, activities, customer groups it wishes to target, needs which

business tries to satisfy are important, as they indicate boundaries on its operation.

▪ They should be highly personalized – unique for which they are developed.

▪ Mission should not be to make profit/surplus which may be required for survival and

growth of organization but cannot be mission.

➢ For a small entrepreneur vision and mission are irrelevant.

▪ Entrepreneur, big or small has to function within several influences external forces.

▪ Competition in different form and different degree is present in all kind and sizes of

business.

▪ Even entrepreneur with small businesses can have complicated environment. To grow

and prosper they need to have clear vision and mission.

➢ Control systems run parallel with strategic levels.

▪ There are three strategic levels – corporate, business and functional. Control Systems

are required at all the three levels. At the top level, strategic controls are built to check

whether the strategy is being implemented as planned and the results produced by the

strategy are those intended.

▪ Down the hierarchy management controls and operational controls are built in the

systems. Operational controls are required for day-today management of business.

➢ You are appointed as a Strategic Manager by XYZ Co. Ltd. Being a Strategic

Manager what should be your tasks to perform?

▪ The primary task of the strategic manager is conceptualizing, designing and executing

company strategies.

▪ For this purpose, his tasks will include:

• Defining the mission and goals of the organization.

• Determining what businesses it should be in.

• Allocating resources among the different businesses.

• Formulating and implementing strategies that span individual businesses.

• Providing leadership to organization.

➢ What are Objective and its characteristics:

▪ Objectives are organization’s performance targets, its expected results and outcomes it

wants to achieve.

▪ They function as a yardstick for tracking an organizations performance and progress.

▪ They are specific quantified versions of goals.

▪ Characteristics:

• Facilitate to achieve mission and goals

• Sets the basis for strategic decision making



• Should have a time frame.

• Should motivate people.

• Should be measurable and controllable.

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Strategic Management CA IPCC...By Santosh Baliga *Based on ICAI material. SB Professional Coaching 3...

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