Scdl Assignments Operations Strategy Formulation

STRATEGIC MANAGEMENT

1. Explain the evolution, role and importance of business policy andstrategic management. What would be the role of manager in thisage?

Introduction: The term strategic management has been traditionally used. New titlesuch as business policy, corporate strategy and policy, corporate policies isessentially and extensively used which means more less the same concept.

Evolution of Strategic Management:

1)In early 1920\u2019s and 1930\u2019s the managers used day-to-day planning methods

to perform any task.

2)To anticipate the future, they tried using tools like preparation of budgets and

control systems like capital budgeting and management by objectives.

3)The techniques were unable to emphasize the future adequately.

4)The next step was they tried using long range planning which was replaced

by strategic planning and later by strategic management.

5)In mid 1930\u2019s, according to the nature of business the planning was done

during Adhoc policy making.

6)As many businesses had just started operations and were mostly in a single

product line, there arose a need for policy making.

7)As companies grew they expanded their products and they catered to more

customer and which in turn increased their geographical coverage.

8)The expansion brought in complexity and lot of changes in the external

environment. Hence there was a need to integrate functional areas.

9)This integration was brought about by framing policies to guide managerial

action.

10)Policies helped to have pre-defined set of actions, which helped people to

make decision.

11)Policymaking was the owner\u2019s prime responsibility.

12)Due to increase in the environment changes, in 1930\u2019s and 40\u2019s policy

formulation replaced ad-hoc policy making, which led to emphasis shifted to

the integration of functional areas in this rapidly changing environment.

13)Especially after II World War there was more complexity and significant

changes in the environment.

14)Competition increased with many companies entering into the market.

15)Policy making and functional area integration was not sufficient for the

complex needs of a business.

ROLE OF STRATEGIC MANAGEMENT: -

1)Due to increase in the competition, in 1960\u2019s there was a demand for critical

look at the bane corrupt of business.

2)The environment played an important role in the business.

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