The Fundamentals Of Entrepreneurship DB
- Pages: 4
- Word count: 793
- Category: Management
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Organization’s mission becomes the cornerstone for its strategy and is necessary for the organization to assess the process identifying the objectives of each functional area. Emphasises on the accomplishment of the organisational objectives, which leads forward to it strategy.
Functional Area Objectives for Strategic Management
The purpose of Entrepreneurship is to determine and communicate a picture of enterprise through a system of major objectives and policies. Strategy is concerned with at unified direction and efficient allocation of organizations resources. A well made strategy guides managerial action and thought which provides an integrated approach for the organization and aids in meeting the challenges posed by the environment.
The nature of strategic management is correlated by the following facts:
- It is a major course of action through which an organization relates itself to its environment particularly in meeting the objectives of the organization.
- It is s blend of external and internal factors. To meet the opportunities and threats provided by the external factors, internal factors are matched with them.
- It is the combination of actions aimed to meet a particular condition, to solve certain problems or to achieve a desirable end. The actions are different for different situations.
- It is future oriented which are required for new situations which have not arisen before in the past.
- It provides overall framework for guiding enterprise thinking actions.
Q 2 Why is strategic planning important to a small company?
Strategic decision making is the responsibility of top management. Strategy operates at different levels vis-a-vis:
- Corporate Level
• Business Level
• Functional Level
On the study of environmental analysis, four grand basic strategic alternatives to garner the market share:
- Expansion: This is adopted when environment demands increase in pace of activity. Company broadens its customer groups, customer functions and the technology. This kind of a strategy had a substantial impact on internal functioning of the organization.
- Modernization: Digital technology was used as the strategic tool to increase production
and reduce costs in long run. Through modernization, aimed to gain
competitive and strategic strength.
- Integration: Through forward integration it gained ownership
over distribution and retailers, thus moving towards
- Diversification: Diversification through the horizontal route involved change in business definition in terms of customer functions, customer groups or alternative technology. It was done to minimize the risk by spreading over several businesses to capitalize organization strength and minimize weaknesses, to minimize threats, to avoid current instability in profit & sales and to facilitate higher utilization of resources. The figure below explains the logic of the competitive advantage.
Molecular Modeling Of Long Term Approach
Two broad categories of resource balancing problems are:
- a) Resource Leveling: Although while drawing up EST Schedules, it is assumed that all skills are available in abundance and can be made available at short notice, yet it has to balance the level of engagement of these resources individually and collectively.
- b) Resource Allocation: In some cases there may be severe constraint on the availability of a particular skill. We endeavor to allocate these resources such that its impact on the overall project duration is minimum.
Q3 What factors should an entrepreneur consider before choosing a form of ownership?
A large part of the factors for entrepreneur strategy seeks to explore the unknown dimensions of the future which emphasizes on what would happen in the near future.
Setting of organizational vision, mission and objectives is the starting point of strategy
formulation. The organizations strive for achieving the end results which are ‘vision’, ‘mission’, ‘purpose’, ‘objective’, ‘goals’, ‘targets’ etc. The hierarchy of strategic intent lays the foundation for the strategic management of any organization. The strategic intent is to make clear what an organization stands for:
Stability: The company serves with same product, in same market and with the existing technology. This is possible when environment is relatively stable. Modernization, improved customer service and special facility may be adopted in stability.
Expansion: This is adopted when environment demands increase in pace of activity. Company broadens its customer groups, customer functions and the technology. These may be broadened either singly or jointly.
Retrenchment: strategy in which organization has to reduce its scope in terms of customer groups, customer functions or alternative technology.
Diversification: it is the change of business definition in terms of customer functions, customer groups or alternative technology. It is done to minimize risks by spreading overall business to capitalize organization strength and minimize weakness.
Choice of Strategic Management:
When the company is in more than one business, it can select more than one strategic alternative depending upon demand of the situation prevailing in the different portfolios.
- Hitt, Michael A, (2001), Strategic Management: Competitiveness and globalization, 4th, Thomson Learning.