Purpose

The organization's purpose outlines why the organization exists; it includes a description of its current and future business (Leslie W. Rue, and Loyd L. Byars) The purpose of an organization is its primary role in society, a broadly defined aim (such as manufacturing electronic equipment) that it may share with many other organizations of its type. The organization's purpose outlines why the organization exists; it includes a description of its current and future business (Leslie W. Rue, and Loyd L. Byars) The purpose of an organization is its primary role in society, a broadly defined aim (such as manufacturing electronic equipment) that it may share with many other organizations of its type.

Mission
The mission of an organization is the unique reason for its existence that sets it apart from all others (A. James, F. Stoner, and Charles Wankel) The organization's mission describes why the organization exists and guides what it should be doing. Often, the organization's mission is defined in a formal, written mission statement. Decisions on mission are the most important strategic decisions, because the mission is meant to guide the entire organization. Although the terms "purpose" and "mission" are often used interchangeably, to distinguish between them may help in understanding organizational goals. he mission of an organization is the unique reason for its existence that sets it apart from all others (A. James, F. Stoner, and Charles Wankel) The organization's mission describes why the organization exists and guides what it should be doing. Often, the organization's mission is defined in a formal, written mission statement. Decisions on mission are the most important strategic decisions, because the mission is meant to guide the entire organization. Although the terms "purpose" and "mission" are often used interchangeably, to distinguish between them may help in understanding organizational goals.

Goals
A goal is a desired future state that the organization attempts to realize (Amitai Etzioni).

Objectives
The term objective is often used interchangeably with goal but usually refers to specific targets for which measurable results can be obtained. Organizational objectives are the end points of an organization's mission. Objectives refer to the specific kinds of results the organizations seek to achieve through its existence and operations (William F. Glueck, and Lawrence R. Jauch) Objective define what it is the organization hopes to accomplish, both over the long and short term. In this paper the terms "goals" and "objectives" are used interchangeably. Specifically, where other works are being referred to and those authors have used the term goal as opposed to objective, their terminology is retained.

Strategy
Strategies are the means by which long-term objectives will be achieved. "A strategy is a unified, comprehensive, and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization" (William F. Glueck, and Lawrence R. Jauch). The role of strategy is to identify the general approaches that the organization utilize to achieve its organizational objectives. Therefore, the choice of strategy is so central to the study and understanding of strategic managemen

Tactics
In contrast, tactics are specifics actions the organization might undertake in carrying its strategy.

Policy
In years past it was common practice to title courses and books in the strategic management areas as "Business policy," if one wished to take up broader range of organizations. In one sense, what has happened is that word strategy has replaced policy. But there is another sense in which the term policy is used that differentiates it from strategy, and from tactics as well. In this view, policies are the means by which objectives will be achieved. "Policies are guide to action. They include how resources are to be allocated and how tasks assigned to the organization might be accomplished ... (William F. Glueck, and Lawrence R. Jauch "

Policies include guidelines, procedures, rules, programs, and budgets established to support efforts to achieve stated objectives. Therefore, policies become important management tools for implementing them.

Strategists
The final key term to be highlighted here is "strategists". Strategists are the individuals who are involved in the strategic management process. Several levels of management may be involved in strategic decision making. However, the people responsible for major strategic decisions are the board of director, president, the chief executive officer, the chief operating officer, and the division managers.

The Scope And Dimension Of Strategic Management

Strategic management focuses on the total enterprise. It involves the planning, directing, organizing, and controlling of the strategy-related decisions and actions of the business.

The Scope Of Strategic Management

J. Constable has defined the area addressed by strategic management as "the management processes and decisions which determine the long-term structure and activities of the organization". This definition incorporates five key themes: * Management process. Management process as relate to how strategies are created and changed. * Management decisions. The decisions must relate clearly to a solution of perceived problems (how to avoid a threat; how to capitalize on an opportunity). * Time scales. The strategic time horizon is long. However, it for company in real trouble can be very short. * Structure of the organization. An organization is managed by people within a structure. The decisions which result from the way that managers work together within the structure can result in strategic change. * Activities of the organization. This is a potentially limitless area of study and we normally shall centre upon all activities which affect the organization. These all five themes are fundamental to a study of the strategic management field and are discussed further in this chapter and other part of this thesis.

Dimensions Of Strategic Management

Strategic management process involves the entire range of decisions. Typically, strategic issues have six identifiable dimensions: * Strategic issues require top-management decisions * Strategic issues involve the allocation of large amounts of company resources * Strategic issues are likely to have significant impact on the long-term prosperity of the firm * Strategic issues are future oriented * Strategic issues usually have major multifunctional or multibusiness consequences * Strategic issues necessitate considering factors in the firm's external environment.

The Strategic Decision Makers

The strategic management process requires competent individuals to ensure its success. Therefore, to understand strategic management, we must know where strategic decisions are made in organizations. Inputs to strategic decisions can be generated in a number of ways. Overall, top management, board of directors, and planning staff tend to be those positions that have the most significant involvement and influence in the strategic management process of organizations. The failure of an organization to achieve its objectives can often be traced to a breakdown at the level of the board or top management. However, the final responsibility rests with top management. Some of the strategic management responsibilities are outlined in

Top Management
The term "top management" refers to a relatively small group of people include president, chief executive officer, vice president, and executive vice president. Because the insights of these executives play such a critical role, a number of writers have stressed the importance of matching the characteristics of these executives with the firm's strategies. The strategic management process of today tends to be dominated by the chief executive officer (CEO). For example, Kenneth R. Andrews described the chief executive's role as "Chief Executive as Architect of Purpose." George Steiner summarized the role of the CEO in strategic management as follows:

1. The CEO must understand that strategic management is his responsibility. Parts of this task, but certainly not all of it, can be delegated. 2. The CEO is responsible for establishing a climate in the organization that is congenial to strategic management. 3. The CEO is responsible for ensuring that the design of the process is appropriate to the unique characteristics of the company. 4. The CEO is responsible for determining whether there should be a corporate planner. If so, the CEO generally should appoint the planner (or planners) and see that the office is located as close to that of the CEO as practical. 5. The CEO must get involved in doing planning. 6. The CEO should have face-to-face meetings with executives for making plans and should ensure that there is a proper evaluation of the plans and feedback to those making them. 7. The CEO is responsible for reporting the results of the strategic management process to the board of directors. The chief executive officer (CEO) is responsible for the final decisions, but its decisions is the culmination of the ideas, information, and analyses of others. n many organizations, the job of strategic management can become so overwhelming, that the chief executive must assign individuals, usually called planning staff personnel, to help with the tasks. Recent theory and studies suggest that middle-level managers attempt to influence business strategy and often initiate strategic proposals.

Board Of Directors
The business which exists in corporate form has a board of directors, elected by stockholders and given ultimate authority and responsibility. Boards typically elect a chairperson who is responsible for overseeing board business, and they form standing committees which meet regularly to conduct their business. A strategy committee is a board committee that works with CEO to develop strategic management process. It is common practice for organizations to have boards of directors consisting of both outsiders and insiders. One approach used to reconcile the differing roles of outside directors and inside strategic decision makers is agency theory. Agency theory defines as a nexus of contractual relationships among various stakeholders, including shareholders, managers, employees, and customers, each motivated by self-interest. In this view, a firm exists to exploit the potential advantages of cooperative behavior among stakeholders, and strengthening the link between the company and its environments. Board of directors it plays an important role in the strategic management process. A strategy committee commonly audits various components of an organization's strategic management process in order to make it more effective and efficient. For example, the

board can demand reexamination of the company's mission, its long-term goals, its corporate strategy, and its approach to the competition. To quote Kenneth Andrews, "A responsible and effective board should require of its management a unique and durable corporate strategy, review it periodically for its validity, use its as the reference point for all other board decisions,"" The boards guides the affairs of corporation and protects stockholder interests. A growing literature suggests that boards can make a difference in the way the firms is managed. Each of the four cells in the matrix can be labelled according to type: caretaker, statutory, proactive, and participative boards. Variations in these qualities affect company performance in different ways: 1. The caretaker board is characterized by a low level of power in both the board and in the CEO. This type of board does not contribute significantly to effective company performance. 2. The statutory board differs from the caretaker board in that a powerful CEO is the central figure in organization decision making. The CEO does not consider the board as a true partner in shaping the strategic posture of the company. 3. The proactive board commands powers that surpass those of its CEO. These boards are a true instrument of corporate governance. 4. The participative board is characterized by discussion, debate, and disagreement. Leadership is shared among management, board members, and outside directors, who constitute a majority. In this case, negotiation and compromise are essential for effective governance. Recently, the role of the directors has been growing in importance because of increasingly vocals stockholders. In essence, the board functions as the brain and soul of the organization and as the guardian of shareholders interests, its pervasive influence in many aspects of organizational life is believed to enrich the firm. Strategic decisions are evaluated by the board of directors, but are the responsibility of top management, supported by corporate planning staffs, that perform analyses and manage the planning processes.

The Strategic Management Process

There probably is general acceptance of the idea that strategic management is concerned with the strategic processes that produce desired responses to an organization's changing environment.

The strategic management process is concerned with a long-run perspective. The time horizon involved often is at least 3 years and normally may be 5 or 10 years into the future. However, in certain extremely dynamic industries, the strategic management process could be concerned with much shorter time frames. Strategic management is the management of change. This involves the system of corporate values, the corporate culture, and all managerial process of change, such as leadership, planning, control, and human resources management. Hence, strategic management can be viewed as a series of steps in which top management should accomplish at least five tasks that C. West Churchman suggested in The Systems Approach (1968): 1. Identify the business's fundamental values and the goals and objectives that arise from them. 2. Assess the business's environment - forces outside the business itself that may be opportunities or threats. 3. Assess the business' resources and capabilities - those things within the control of the business, such as people, machinery, facilities, contracts, image, and goodwill - that can be allocated to achieve goals and objectives. 4. Identify or form the organization's component's (a) internal units that receive allocated resources and carry out the business's work and (b) an organizational structure that includes the units themselves and the relationships of authority, responsibility, and communication that they have with one another. 5. Develop the management and decision-making structure: the process used to allocate the business's resources to its components so as to realize goals and sustain values within constraints of environment. At the center of the model is embedded Churchman's first imperative: to identify the organization's values. Without knowledge of its values, an organization cannot develop a mission, goals, and objectives. Churchman's remaining four imperatives can be found within the four boxes in the circle. The arrows in Figure 2-3 shows important interdependency among the four factors of strategic management: strategic planning, resource requirements, organizational structure, and strategic control. Strategic planning is the key link between strategic management and the organization's external environment. Resource requirement is the factor that links strategic management to the organizations's resources, including finances, facilities and equipment, land, access to information, goodwill, and personnel. Strategic control relates to the implementation of a strategy. Organizational structure links strategic management to organizational realities. According to this model, environmental demands are met through a strategic planning process, involving the formulation of missions, goals, and objectives.

Strategic management can thus be seen as a "total" system perspective and not merely as the process of choosing from among alternative long-range plans. It reflects the organization's "strategic capability" to balance the demands imposed by external and internal forces and to integrate the overall functioning of the organization so as to allocate resources in a manner best designed to meet goals and objectives (Alan Rowe, Richard O. Mason, and Karl E. Dickel). Today's manager is faced with an accelerating rate of change in technical, social, political, and economic forces. As a result of these changing forces, the management process has become more difficult, requiring greater skills in planning, analysis, and control. Thus, the concept of strategic management is still involving and will continue to undergo change.