ASSIGNMENT ON

(A) Meaning, Features and Importance of

Strategic Management

(B) Strategic Choice and various strategies

to achieve Stakeholder objectives

(C) Ethical Issues in Organisations and

appropriate ways to cope up with ethical
dilemmas

SUBMITTED TO: SUBMITTED BY:

Ms. Navneet Kaur Abhishek Jain
MBA(FYIC)-Sem 8
16411019

UNIVERSITY SCHOOL OF APPLIED MANAGEMENT,

PUNJABI UNIVERSITY, PATIALA
 STRATEGIC MANAGEMENT

The term ‘strategic management’ is used to denote a branch of

management that is concerned with the development of strategic vision,
setting out objectives, formulating and implementing strategies and
introducing corrective measures for the deviations to reach the
organization’s strategic intent. It has two-fold objectives:
1. To gain competitive advantage, with an aim of outperforming the
competitors, to achieve dominance over the market.
2. To act as a guide to the organization to help in surviving the
changes in the business environment.

Strategic management provides overall direction to an

enterprise and involves specifying the organization's objectives,
developing policies and plans to achieve those objectives, and then
allocating resources to implement the plans. Strategic management is
divided into several schools of thought. A prescriptive approach to
strategic management outlines how strategies should be developed, while a
descriptive approach focuses on how strategies should be put into practice.
These schools differ on whether strategies are developed through an
analytic process, in which all threats and opportunities are accounted for,
or are more like general guiding principles to be applied.
Companies, universities, non-profits, and other organizations
can use strategic management as a way to make goals and meet objectives.
A strategic manager may oversee strategic management plans and devise
ways for organizations to meet their benchmark goals. Strategic
management extends to internal and external communication practices as
well as to tracking, which ensures that the company meets goals as defined
in its strategic management plan.

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Example of Strategic Management:
A for-profit technical college wishes to increase new student enrollment
and enrolled student graduation rates over the next three years. The
purpose is to make the college known as the best buy for a student's money
among five for-profit technical colleges in the region, with a goal of
increasing revenue.

In that case, strategic management means ensuring the school has funds to
create high-tech classrooms and hire the most qualified instructors. The
college also invests in marketing and recruitment and implements student
retention strategies. The college’s leadership assesses whether its goals
have been achieved on a periodic basis.

PROCESS OF STRATEGIC
MANAGEMENT

Strategic management process is defined as the process by which

managers make a choice of a set of strategies for the organization that will
enable it to achieve better performance. Strategic management is a
continuous process that appraises the business and industries in which the
organization is involved; appraises it’s competitors; and fixes goals to
meet all the present and future competitor’s and then reassesses each
strategy. Strategic management process has following four steps:

ENVIRONMENT STRATEGY STRATEGY STRATEGY

SCANNING FORMULATION IMPLEMENTATION EVALUATION

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 FEATURES OF STRATEGIC
MANAGEMENT

1. Conscious Process: Strategy is a product of the developed

conscience and intellect that we humans proudly possess and
employ. Strategic management implies the usage of the brain and the
heart and is not a routine ever continuing process. It requires great
skill and experience to be carried out effectively and requires full
application of one’s conscience.

2. Dependent on Personal Qualities: The above two considerations

make it amply clear that strategic management is heavily dependent
on the personal qualities of the managers occupying the top level
position. These personal qualities including skills and experience
obtained over years of employment and observation cannot be
imparted by training or coaching classes and requires practical
exposure for extended periods of time unless the person is born with
the talent of strategizing.

3. Goal Oriented Process: The process of Strategic Management is a

goal oriented process. The process is done with the intention and
goal of analyzing the various elements through SWOT analysis and
other tools and to develop a plan or strategy that effectively allows
the business to maneuver itself around every hurdle and make use of
its strength. This process also plays the role of making all other
functions of the business goal oriented as well.

4. Facilitates decision making: Strategic management play an integral

role in making important decisions. Whenever a manager has to
make a decision he has to think about the bearing of such a decision
on the overall strategy and the business’ trajectory. Thus the
strategies developed acts as a guide to make efficient and accurate
decisions.

5. Primary Process: Strategic Management is the primary process in

any business. The strategies that the business has to apply in its
activities are developed at the initial stage itself and only after the

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 creation of the strategy that other processes commence by making
the strategy as its basis.

6. Pervasive Process: Strategic Management is a pervasive process

seen in all levels of the business. The core strategies are formulated
for the entire business by the top level management and strategies to
efficiently achieve the overall goal so laid down by the top level
management is developed through the various lower business units.

IMPORTANCE OF STRATEGIC
MANAGEMENT
1. Alertness in Employees: The alertness among the employees
increases the success of objectives and targets due to strategic
management. While framing the strategy management studies the
capability and weakness of employees and resources and taking
the steps to improve them, the employees become more alert
about their own performance and the group activity.

2. Increase in the Efficiency of the Employees: The officers and

experienced employees of all the three levels of re-engagement
are included in strategic management process. The necessary
inter-process in being done with them and for the success of
strategy necessary training is also given to them. By this there is a
notable increase in efficiency of employees and they get
inspiration to work more.

3. Increase in Profitability: The profitability of a unit depends upon-

the maximum use of limited resources. Through strategically
management process, the managers cannot only make the
maximum use of financial resources but also they can use
maximum man power to increase the overall productivity and
profitability of the unit.

4. Motivation to Group Activity: By taking strategic decisions

through the group, integration between group members increases

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 on accepting various optional strategies which result in to co-
operation and unity. Not only that, but the managers can also get
the advantage of special strength of group members.

5. Reduction in cost of capital: It is a fact that the unit which is

successful in raising the capital of the lowest possible cost is
almost eligible to face the competition right from the beginning.
After getting the estimate of capital requirement the managers
select the sources of capital from where they can acquire the
capital in a strategically manner. The strategic management has
been proved to be very useful to raise the estimated capital at
lowest possible rate, simple conditions for mortgage, return of
borrowed capital and conversion of borrowed capital into owner’s
capital.

6. Acceptance of Organizational Changes: Normally the employees

do not accept the changes made in the organization, because due
to that the change occurs in their roles also. As a result the
necessity to giving training of the new work to the employees
arises. Not only that but because of such changes many
departments also have to be closed. In these circumstances the
problem of the safety of job arises. In strategic management
process the capability of employees is also considered. Not only
that, but for its development, efforts are made through training
programmed so no question arises for the employees for not
accepting the changes.

7. Prevention of Organizational Gap: Out of the departmental

activities organization if any activity is not allotted to any
employee, that activity is known as organizational gap. If the
allotment of any work is left out by mistake, then none of the
employees can be held responsible for it. In strategic management
process, because of the interacting process being done with each
employee, all the employees are given equal works and so there
does not arise a questions of organizational gaps.

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 STRATEGIC CHOICE

Business planning is a process that companies use to determine a course of

action that leads to revenue growth and increased profits. In other words, it
is a path to success. Two important aspects of the business planning
process are setting objectives, also called goals, and making strategic
choices to reach these objectives.
Every company has a certain amount of resources available to
it. Strategic Choice involves a whole process through which a decision is
taken to choose a particular option from various alternatives. There can be
various methods through which the final choice can be selected upon.
Managers and decision makers keep both the external and internal
environment in mind before narrowing it down to one. A strategic choice
could be acquiring a competitor if the objective is to gain market share.
Another strategic choice might be to focus on selling at trade shows rather
than using advertising to reach potential customers.
Whether a business succeeds or fails depends in large measure
on the strategic choices made by the owner. Spending large amounts of
time and money introducing a product that turns out to have a very limited
market is an example of a bad strategic choice. Anticipating a change in
consumer tastes and introducing a service to take advantage of that change
before competitors do is an example of a good strategic choice. The
development of business strategy takes into account that all companies
must cope with limited resources to some extent. The most successful
companies can allocate scarce resources to the projects that have the
greatest positive impact on revenue growth or improvements in
productivity and efficiency that can increase profit margins.

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 PROCESS OF STRATEGIC CHOICE

FOCUSING ON STRATEGIC
ALTERNATIVES

ANALYSING THE STRATEGIC

ALTERNATIVES

EVALUATING THE STRATEGIC

ALTERNATIVES

CHOOSING FROM THE STRATEGIC

ALTERNATIVES

Following example best describe the Strategic Choice:

Suppose a company has a dilemma in front of it of whether or not to invest
in a new inorganic growth process. There are multiple options available
for overtaking purpose. Now the process involved would be observing
pros and cons of the companies being overtaken. Then after short listing
few of them considered the business, their advantages, and their value
addition to parent company.
After having the list of few, now the final narrowing down to a single
company would be a strategic choice on the factors mentioned above.
Many stakes would be considered considering both internal and external
situations. Hence, this concludes the definition of Strategic Choice along
with its overview.

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 STRATEGIES TO ACHIEVE
STAKEHOLDERS OBJECTIVES

1. Identify the diverse stakeholder groups as part of

your environmental scan before you begin the strategic planning
process.

• Who is going to be impacted by your project?

• What are their interests in the project?
• Are the direct and indirect stakeholders?
• Who are the most important stakeholders?

2. Identify who the stakeholder representatives are.

• Who are the individuals that you need to talk to as part of each
stakeholder group?

3. Create a system to solicit their feedback.

• Set a calendar of steps and outreach as part of your action plan.

(systemize it)
• Seek multiple levels of communication from the organizations.
(Staff, board, etc)

4. Incorporate their feedback into your strategic planning process

• Use their feedback and concerns to create your strategic priorities.

5. Report back

• As part of your implementation and communication plan and go

back to your stakeholders and show them what you came up with.
• Look at them as strategic partners to help you achieve your goals.
• Be transparent with your information

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 STAKEHOLDER ANALYSIS

KEEP MONITOR
POWER/INFLUENCE

SATISFIED CLOSELY

KEEP
MONITOR
INFORMED

INTEREST

As part of your project plan establish the frequency and amount of

information needed by different stakeholders.
If you incorporate stakeholder engagement into business as usual and look
at your stakeholders as strategic partners, you'll have a greater likelihood
that the initiatives and collaboration will continue beyond the term of your
current board.

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 ETHICAL ISSUES IN
ORGANISATIONS

Business ethics is the study of appropriate business policies and practices

regarding potentially controversial subjects including corporate
governance, insider trading, bribery, discrimination, corporate social
responsibility, and fiduciary responsibilities. The law often
guides business ethics, but at other times business ethics provide a basic
guideline that businesses can choose to follow to gain public approval.
Business ethics ensure that a certain basic level of trust exists between
consumers and various forms of market participants with businesses. For
example, a portfolio manager must give the same consideration to the
portfolios of family members and small individual investors. These kinds
of practices ensure the public receives fair treatment.

1. Business ethics refers to implementing appropriate business policies

and practices with regard to arguably controversial subjects.
2. Some issues that come up in a discussion of ethics include corporate
governance, insider trading, bribery, discrimination, social
responsibility, and fiduciary responsibilities.
3. The law usually sets the tone for business ethics, providing a basic
guideline that businesses can choose to follow to gain public
approval.

Various ethical issues in organisations may be:

1. Discrimination and Harassment: Laws require organizations to be

equal employment opportunity employers. Organizations must
recruit a diverse workforce, enforce policies and training that
support an equal opportunity program, and foster an environment
that is respectful of all types of people. When discrimination and
harassment of employees based on race, ethnicity, gender, disability
or age occurs, not only has an ethical line been crossed but a legal
one as well. Most companies are vigilant to avoid the costly legal
and public ramifications of discrimination and harassment, so you
may encounter this ethical dilemma in more subtle ways, from
seemingly “harmless” off-colour jokes by a manager to a more
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 pervasive “group think” mentality that can be a symptom of a toxic
culture.

2. Unethical leadership: Having a personal issue with your boss is one

thing, but reporting to a person who is behaving unethically is
another. This may come in an obvious form, like manipulating
numbers in a report or spending company money on inappropriate
activities; however, it can also occur more subtly, in the form of
bullying, accepting inappropriate gifts from suppliers, or asking you
to skip a standard procedure just once. With studies indicating that
managers are responsible for 60% of workplace misconduct, the
abuse of leadership authority is an unfortunate reality.

3. Health and Safety: Employee’s safety in the workplace is ethical as

well as the human right that should be provided in the organisation.
It is one of the sensitive factors that cannot be avoided in the
organisation. Much of the work in the industries and companies is
hazardous because of the use of heavy technology. Nowadays, there
is much use of machineries and high temperature based production
processes. In addition, there is more dependence on chemical
compounds. All these aspects increase injuries and accidents in the
workplace. For e.g., job of a bullfighter or bomb disposal expert.
New sources of accidents and illness are increasing day by day. Risk
is present in every job but its frequency differs from job to job.
There must be proper precautions for handling such machinery.

4. Privacy issues: All employees working in the organisation have their

own personal life. An employee needs the organisation to
directly/indirectly protect his/her personal life. This personal life
includes religious, social and political beliefs. Without the
permission of the employee, the privacy must not be leaked. Such an
unethical act should not be conducted by the organisation.

5. Accounting: Ethics in accounting are concerned with how to make

good and moral choices in regard to the preparation, presentation
and disclosure of financial information. Most accounting scandals
over the last two decades have centred on fraudulent financial
reporting. Fraudulent financial reporting is the misstatement of the

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 financial statements by company management. Usually, this is
carried out with the intent of misleading investors and maintaining
the company's share price.

ETHICAL DILEMMA
An ethical dilemma is a moral situation in which a choice has to be made
between two equally undesirable alternatives. Dilemmas may arise out of
various sources of behaviour or attitude, as for instance, it may arise out of
failure of personal character, conflict of personal values and organizational
goals, organizational goals versus social values, etc.
Examples of ethical dilemmas include:
1. Taking credit for other’s work
2. Personal friendships
3. Offering a client a worst product for your own profit
4. Utilising inside knowledge for your own profit

In order to solve ethical dilemmas, companies and organisations should

develop strict ethical standards for their employees. Every company must
demonstrate its concern regarding the ethical norms within the
organisation and they must provide ethical training for their employees.
The problem with ethical decision making is that a decision
in itself cannot be taken in a vacuum; one single decision affects lots of
other decisions and the key is to strike a balance to ensure a win-win
situation is arrived upon.
Though there are no golden rules to resolve ethical issues
but managers can take a number of initiatives to resolve ethical issues.
These can be as follows:

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RESOLVING AN ETHICAL DILEMMA

1. Know the Principles: In ethical decision making there are three basic
principles that can be used for resolution of problem. These three
principles are that of intuitionism, moral idealism and utilitarianism.
The principle of intuition works on the assumption that the HR
manager is competent enough to understand the seriousness of the
situation and act accordingly, such that the final decision does not
bring any harm to any person involved directly or indirectly. The
principle of moral idealism on the other hand states that there is a
clear distinction between good and bad, between what is acceptable
and what is not and that the same is true for all situations. It
therefore asks to abide by the rule of law without any exception.
Utilitarianism concerns itself with the results or the implications.
There is no clear distinction between what is good and what is bad;
the focus is on the situation and the outcome.

2. Debate Moral Choices: Before taking a decision, moral decisions

need to be thought upon and not just accepted blindly. It is a good
idea to make hypothetical situations, develop case studies and then
engage others in brainstorming upon the same. This throws some
light into the unknown aspects and widens the horizon of
understanding and rational decision making.

3. Balance Sheet Approach: In balance sheet approach, the manager

writes down the pros and cons of the decision. This helps arrive at a
clear picture of things and by organizing things in a better way.

4. Engage People Up and Down the Hierarchy: One good practice is to

announce ones stand on various ethical issues loudly such that a
clear message to every member of the organization and to those who
are at the greater risk of falling prey to unethical practices. This will
prevent the employees from resorting to unethical means.

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 5. Integrating Ethical Decision Making into Strategic Management:
Morality and ethical make up for a perennial debate and ethical
perfection is almost impossible. A better way to deal with this is to
integrate ethical decision making into strategic management of the
organization. The way the HR manager gains an alternate
perspective rather than the traditional employee oriented or
stakeholder oriented view.

All these steps can bring better clarity into resolving ethical dilemmas. The
choice lies with the manager and the organization value clarity.

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 BIBLIOGRAPHY

1. www.managementstudyguide.com
2. www.corporatefinanceinstitute.com
3. www.biggsuccess.com
4. www.tutorialspoint.com
5. www.floridatechonline.com
6. www.nap.edu.com

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