Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. The purpose of strategy is to create competence (things firm does better than competitors), synergy (between different parts of the organisation and their activities) and value creation so as to attain vision and mission. Managers must learn the impact of both individual and team contributions on the direction of the organization. Her work appears in "The Multi-Generational Workforce in the Health Care Industry," and she has been cited in numerous publications, including journals and textbooks that focus on human resources management practices. Strategic information management is a salient feature in the world of information technology (IT). Uploader Agreement. Content Filtration 6. It can be of two types, viz., Backward Integration – acquiring a firm engaged in raw materials (Tata steel buying a coal mine company in Indonesia); and Forward Integration — acquiring control over a firm/activity taking it nearer to the ultimate consumer (Reliance Industries, a petro refining company, also starting petrol pumps). To create a fit between the environment and the strategic intent of the organisation, a suitable strategy has to be selected for implementation. Ruth Mayhew has been writing since the mid-1980s, and she has been an HR subject matter expert since 1995. Strategic Goals: Where future is unknown such an analysis is impossible. It is used to examine which environmental and internal factors affect the organization's position and how successfully they are meeting the goals and objectives of the organization and its departments. Adding a new customer function(s), customer group(s), or alternative technologies to an existing business is known as diversification. It is the strategy which provides the reason to initiate tactics. It involves creating organizations which generate value even in turbulent environment over a sustained period of time. To compete successfully the first generic strategy is Cost- leadership (Microsoft produces software for PCs at such a cost that no hardware manufacturer ever thinks of producing himself); second is Differentiation (Dell computers are sold online, whereas all other manufacturers use physical distribution); and finally it is Focus. (b) To highlight the strengths, which the company would try to exploit. All the strategies discussed above can be applied simultaneously, sequentially, or in a combination. If the vision is to be industry leader, increases sales is part of this strategy, but to sell in bulk to achieve the vision, the discount given to a bulk buyer is tactic. And in such situations strategic decisions rely mainly on judgment and intuition. It then realized that they were in entertainment business. Gathering requirements that are accurate and measurable is key. No discussion on strategy formulation will be complete without a discussion of SWOT Analysis. It means substantially reducing the scope of business activities. If someone asks any businessperson to define his business, almost everyone sill give a manufacturing definition. Formulating a strategic plan involves discussions on what constitutes wise business decisions, how to recognize competition and how to respond to it. The University of Minnesota course on strategic management teaches students to consider corporate culture when constructing an organization's strategic framework. In the last chapter we have already mentioned about corporate, strategic Business Unit strategies, and functional Strategies. By its influence, it is multidimensional: Strategy not only tells about vision and objectives, but also the way to achieve them. Disclaimer 8. It provides Vision – what the organisation wants to become, Mission – what business the firm is in, Values – a common set of beliefs guiding the behaviour of organisational members, and Objectives — Qualitative goals. In this age of information explosion, too much of data is a big problem. It helps in analyzing the internal and external factors influencing an organization. Lack of sufficient information for strategy formulation is the most common. Sometimes the chosen decision may be a compromising decision, lacking clarity or direction. By its nature, it is multidisciplinary: Strategy involves marketing, finance, human resource and operations to formulate and implement strategy.
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