1 An Introduction to Strategic Management
CHAPTER
Introduction
▪ A business is created to provide products or services to customers.
If it can conduct its operations effectively, its owners earn a
reasonable return on their investment in the firm.
In addition, it creates jobs for employees.
Thus, businesses can be beneficial to society in various ways.
▪ A business (or firm) is an enterprise that provides products or
services desired by customers.
Along with the large, well-known businesses such as the Coca-Cola
Company and IBM, there are many thousands small businesses that
, provide employment opportunities and produce products or services
that satisfy customers.
▪ Important decisions that need to be made in a business
1. Is it worthwhile to create a business?
2. What resources does the business need to provide its
services?
3. What types of stakeholders must the business attempt to
satisfy?
4. What are the key functions that are supposed to be
performed to manage the business?
Management
▪ Management is a field of study and profession which pertains to
management principles, techniques, functions, etc.
Here, we find a team or class of people (Individual) or may be a group
of persons who perform managerial activities.
▪ It is a process of managerial activities-planning, organizing,
staffing, directing, and controlling.
Management is both an art and a science.
It is the art of making people more effective than they would have
been without you.
The science is in how you do that.
Example:
Four workers can make 6 units in an eight-hour shift without a
manager.
If I hire Mr. Madan to manage them and they still make 6 units
a day, what is the benefit to my business of having hired Mr.
Madan?
On the other hand, if they now make 8 units per day, Mr. Madan,
the manager, has value.
▪ On the basis of the above example, management can be defined as-
“the art of getting things done through and with people”.
Definitions
“Art of knowing what you want to do and then seeing that it is done the
best and cheapest way”. F.W. Taylor
,“To Manage is to forecast, to plan, to organise, to command, to
coordinate and to control”. Henry Fayol
“Management is a function, a discipline, a task to be done, and managers
practise this discipline, carry out the functions and discharge these
tasks.” Peter F. Drucker
“Management is the process by which managers create, direct, maintain
and operate purposive organizations through systematic, coordinated and
co-operative human effort.” Dalton McFarland
Management Process in an Organization
The term ‘management’ is used in two senses, such as:
1. A key group in an organisation in-charge of its affairs
✓ In relation to an organisation, management is the chief
organ entrusted with the task of making it a purposeful
and productive entity, by undertaking the task of
bringing together and integrating the disorganised
resources of manpower, money, material, and
, technology, which are then combined into a functioning
whole.
✓ An organisation becomes a unified functioning system
when management systematically mobilises and utilises
the diverse resources efficiently and effectively.
✓ The survival and success of an organisation depend to a
large extent on the competence and character of its
management.
✓ Management has to also facilitate organisational change
and adaptation for effective interaction with the
environment.
2. A set of interrelated functions and processes carried out
by the management of an organisation:
✓ Functions include Planning, Organising, Directing,
Staffing and Control.
✓ The functions or sub-processes of management are
wide-ranging but closely interrelated.
✓ They range all the way from the determination of the
goals, design of the organisation, mobilisation and
acquisition of resources, allocation of tasks and
resources among the personnel and activity units and
installation of control system to ensure that what is
planned is achieved.
✓ Managers formulate organisational goals, values and
strategies, to cope with, to adapt and to adjust
themselves with the behaviour and changes in the
environment.
DO YOU KNOW?
Three Levels of Management
I. Administrative or Top Level
➢ It consists of the board of directors, chief executive or
managing director.
➢ The top management is the ultimate source of authority, and
it manages goals and policies for an enterprise.
➢ It devotes more time on planning and coordinating functions.
CHAPTER
Introduction
▪ A business is created to provide products or services to customers.
If it can conduct its operations effectively, its owners earn a
reasonable return on their investment in the firm.
In addition, it creates jobs for employees.
Thus, businesses can be beneficial to society in various ways.
▪ A business (or firm) is an enterprise that provides products or
services desired by customers.
Along with the large, well-known businesses such as the Coca-Cola
Company and IBM, there are many thousands small businesses that
, provide employment opportunities and produce products or services
that satisfy customers.
▪ Important decisions that need to be made in a business
1. Is it worthwhile to create a business?
2. What resources does the business need to provide its
services?
3. What types of stakeholders must the business attempt to
satisfy?
4. What are the key functions that are supposed to be
performed to manage the business?
Management
▪ Management is a field of study and profession which pertains to
management principles, techniques, functions, etc.
Here, we find a team or class of people (Individual) or may be a group
of persons who perform managerial activities.
▪ It is a process of managerial activities-planning, organizing,
staffing, directing, and controlling.
Management is both an art and a science.
It is the art of making people more effective than they would have
been without you.
The science is in how you do that.
Example:
Four workers can make 6 units in an eight-hour shift without a
manager.
If I hire Mr. Madan to manage them and they still make 6 units
a day, what is the benefit to my business of having hired Mr.
Madan?
On the other hand, if they now make 8 units per day, Mr. Madan,
the manager, has value.
▪ On the basis of the above example, management can be defined as-
“the art of getting things done through and with people”.
Definitions
“Art of knowing what you want to do and then seeing that it is done the
best and cheapest way”. F.W. Taylor
,“To Manage is to forecast, to plan, to organise, to command, to
coordinate and to control”. Henry Fayol
“Management is a function, a discipline, a task to be done, and managers
practise this discipline, carry out the functions and discharge these
tasks.” Peter F. Drucker
“Management is the process by which managers create, direct, maintain
and operate purposive organizations through systematic, coordinated and
co-operative human effort.” Dalton McFarland
Management Process in an Organization
The term ‘management’ is used in two senses, such as:
1. A key group in an organisation in-charge of its affairs
✓ In relation to an organisation, management is the chief
organ entrusted with the task of making it a purposeful
and productive entity, by undertaking the task of
bringing together and integrating the disorganised
resources of manpower, money, material, and
, technology, which are then combined into a functioning
whole.
✓ An organisation becomes a unified functioning system
when management systematically mobilises and utilises
the diverse resources efficiently and effectively.
✓ The survival and success of an organisation depend to a
large extent on the competence and character of its
management.
✓ Management has to also facilitate organisational change
and adaptation for effective interaction with the
environment.
2. A set of interrelated functions and processes carried out
by the management of an organisation:
✓ Functions include Planning, Organising, Directing,
Staffing and Control.
✓ The functions or sub-processes of management are
wide-ranging but closely interrelated.
✓ They range all the way from the determination of the
goals, design of the organisation, mobilisation and
acquisition of resources, allocation of tasks and
resources among the personnel and activity units and
installation of control system to ensure that what is
planned is achieved.
✓ Managers formulate organisational goals, values and
strategies, to cope with, to adapt and to adjust
themselves with the behaviour and changes in the
environment.
DO YOU KNOW?
Three Levels of Management
I. Administrative or Top Level
➢ It consists of the board of directors, chief executive or
managing director.
➢ The top management is the ultimate source of authority, and
it manages goals and policies for an enterprise.
➢ It devotes more time on planning and coordinating functions.
