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free mba semester 4 assignments answer-MB0052 -Q1. (a) Define “Strategic Management” and “Strategic Planning”.

Answer: (a) Strategic Management: ‘Strategic management is that set of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives.

‘Strategic management is primarily concerned with relating the organization to its environment, formulating strategies to adapt to that environment, and, assuming that implementation of strategies takes place.

All the management functions of a company can be broadly classified into two categories:
strategic and operational. Strategic functions are performed more at the senior and top management level, and operational functions are discharged more by middle and lower management levels. In other words, it can be said that, as the level of management moves up, the managers perform more strategic functions and less operational functions. Also, in any company, operational functions constitute a higher percentage of total management functions than strategic functions.

Strategic Planning: A strategic plan, also called a corporate plan or perspective plan, is a blueprint or document which incorporates details regarding different elements of strategic management.

The concept and role of strategic planning would be clear if we mention the major areas of strategic planning in an organization.

First, strategic planning is concerned with environment or rather, the fit between the environment, the internal competencies and business (es) of a company. Second, it is concerned with the portfolio of businesses a company should have. More specifically, it is concerned with changes—additions or deletions—in a company’s product-market postures.
Third, strategic planning is mostly concerned with the future or the long-term dynamics of an organization rather than its day-to-day tasks or operations.

Fourth, strategic planning is concerned with growth—direction, pattern and timing of growth. Fifth, strategy is the concern of strategic planning. Growth priorities and choice of corporate strategy are also its concerns. Finally, strategic planning is intended to suggest to an organization, measures or capabilities required to face uncertainties to the extent possible.

(b) Benefits of Strategic Management: An organization can derive many benefits from strategic management. Strategic management allows an organization to be more proactive than reactive in shaping its own future. It allows an organization to initiate and influence rather than just respond to activities or situations; and, this enables the organization to exercise control over its present activities and give directions to growth and development.

Small business owners, CEOs and managers of many profit and non-profit organizations have recognized the benefits of strategic management. The benefits of strategic management can be both financial and non-financial.

Different research studies indicate that organizations using strategic management are more profitable and successful than those which do not. Companies using strategic management techniques show significant improvement in productivity, sales and profitability compared to the ones without systematic planning. High-performing companies do more systematic planning to prepare for future changes in the environment—both internal and external. 


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