Lecture : 01 - Introduction and Concept - I

Summary

Professor Sanjib Chowdhury introduces the strategic management course, emphasizing its evolution from military origins to modern business practices. He outlines the course's focus on defining strategy, its importance in aligning organizational goals, and managing complexity and uncertainty. The lecture also touches on the genesis of strategic management, its benefits, and the elements involved, concluding with a look forward to discussing various strategies and decision-making models in future sessions.

Takeaways

• 📚 The course is focused on strategic management for competitive advantage, led by Professor Sanjib Chowdhury from IIT Kharagpur.
• 🏛️ The origin of the word 'strategy' is traced back to ancient Greek, initially related to military planning and leadership.
• 🌐 The modern concept of 'strategy' in business was highlighted in the mid-20th century, particularly at the 1955 National Business Conference sponsored by Harvard Business School.
• 🏢 Chandler's study on organization and structure emphasized the importance of strategy in organizational development.
• 📈 Ansoff's 1965 book 'Corporate Strategy' contributed significantly to the formulation of strategy, drawing from his experience at Lockheed Aircraft Corporation.
• 🔄 The evolution from 'Business Policy' to 'Strategic Corporate Planning' reflects the need to integrate internal and external environmental factors for better planning and productivity.
• 🌟 Strategy is defined as the determination of long-term goals and objectives, adoption of courses of action, and allocation of necessary resources, as per Alfred Chandler.
• 💡 Strategic management is described as the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational goals.
• 🔎 The need for strategic management arises from the complexity and uncertainty in today's business environment, necessitating a systematic approach to strategy formulation.
• 🏆 Benefits of strategic management include convergence of common goals among teams, preparation for future uncertainties, and reduction of conflicts and resistance to new strategies.
• 🔄 Stimuli for strategy change can include new CEO appointments, external interventions, ownership changes, or declining performance, indicating the dynamic nature of strategic planning.

Q & A

What is the title of the course that Professor Sanjib Chowdhury is teaching?

The title of the course is 'Strategic Management for Competitive Advantage'.

What is the origin of the word 'strategy' according to the lecture?

The word 'strategy' is believed to have originated from the Greek word 'strategtia' or 'strategos', which were used in the context of directing military forces around 500 BC.

When was the term 'strategy' first highlighted in a business context in the United States?

The term 'strategy' was first highlighted in a business context in the United States during the 25th National Business Conference in 1955, sponsored by the Harvard Business School Association.

What was the subject previously known as before 'Strategic Management' became popular?

The subject was previously known as 'Business Policy', which aimed to integrate internal company affairs for better cohesion, productivity, and planning.

What is the definition of strategy given by Alfred Chandler?

Alfred Chandler defined strategy as the determination of basic long-term goals and objectives of an enterprise, the adoption of courses of action, and the allocation of resources necessary to achieve those goals and objectives.

What are the three main components of strategy according to Chandler's definition?

The three main components are the formulation of the strategy, the implementation of the strategy, and the allocation of resources necessary to achieve the set goals and objectives.

Why is strategic management necessary in today's complex business environment?

Strategic management is necessary due to the increased complexity, uncertainty, fierce competition, complex rules, pervasive risks, and a higher number of unknown variables in the business environment.

What are the benefits of strategic management for an organization?

The benefits include convergence of common goals among various groups within the organization, better preparedness to face future uncertainties, reduction of conflict and resistance, and proactive approach to deal with an uncertain future.

What are the three tests to determine a winning strategy?

The three tests are the Fit Test, which ensures internal resource capabilities match external market demands; the Competitive Advantage Test, which requires a sustainable competitive advantage; and the Performance Test, which measures competitive strength and financial performance.

Can you explain Mintzberg's model of strategic decision-making mentioned in the lecture?

Mintzberg's model includes the Entrepreneurial mode, where the owner or CEO drives decision-making based on their vision; the Adaptive mode, which is reactive and based on competitors' actions; the Planning mode, which is systematic and both proactive and reactive; and Logical Incrementalism, which is a combination of all three modes.

What are the differences between policy, strategy, and tactics as discussed in the lecture?

Policy is a set of guidelines for decision-making within an organization. Strategy is the determination of long-term goals and objectives and the means to achieve them. Tactics are immediate plans to seize market opportunities or safeguard against imminent risks.