 The word ‘strategy’ is derived from a Greek word ‘ strategos’, which means generalship----the actual direction of military force  Strategy is a plan or course of action or a set of decision rules making a pattern or creating a common thread  Strategy is the pattern or common thread related to the organization’s activities which are derived from the policies, objectives & goals  Strategy is related to pursuing those activities which move an organization from its current position to a desired future state  Strategy is the means to achieve objectives

 A strategy is a long-term plan of action designed to achieve a particular goal  Strategy applies to many disparate fields such as: Military Strategy, Economic Strategy, Environmental Strategy, Corporate Strategy, Expansion, Retrenchment, Merger & Acquisition Strategy etc.  Strategy includes the determination & evaluation of alternative paths to an already established mission or objectives & eventually choosing the right alternative

 Strategies are specific actions suggested to achieve the objectives  Strategies are action oriented  Everyone is empowered to implement the strategy  Strategies are concerned with uncertainties with competitive situation like risk etc. which are likely to take place at a future date  Strategy is deployed to mobilize the available resources in the best interest of the company

 It is the dynamic process of formulation, implementation, evaluation & control of strategies to realize the organization’s strategic intent.  It is the set of decisions & actions resulting in formulation, implementation of strategies designed to achieve the objectives & goals of an organization

 The Strategic management approach emphasizes interaction by managers at all levels of the organization at hierarchy in planning & implementation  Strategies formulation activities enhance the problem prevention capabilities of the organization  Gaps & overlaps in activities among diverse individuals & groups should be reduced because of the participation in strategy formulation  Resistance to change should also be reduced

 Strategic decision making is the primary task of the senior management  Most people agree that decision making is the process of selecting a course of action from among many alternatives.  The process is as follows Objectives to be achieved are determined 2. Alternative ways of achieving the objectives are identified 3. Each alternative is evaluated in terms of its objective-achieving ability & 4. The best alternative is chosen

1. Criteria for Decision Making: There are three major viewpoints regarding setting criteria for decision-making---  Concept of Maximization:  It is based on the thinking of economists who consider objectives as those attributes which are set at the highest point.  The behaviour of the firm is oriented towards achieving these objectives &, in the process, maximizing its returns

 Concept of Satisficing : This envisages setting objectives in such a manner that the firm can achieve them realistically, through a process of optimization  Concept of Incrementalism:  According to this, the behaviour of the firm is complex & the process of decision making, which includes objective setting, is essentially a continually – evolving political consensus building.  Through such an approach, the firm moves towards its objectives in small, logical & incremental steps

2. Rationality in Decision Making: It means exercising a choice from among various alternative courses of action in such a way that it leads to the achievement of objectives in the best possible manner 3. Creativity in Decision Making:  To be creative, a decision must be original & different.  A creative strategic decision-making process may considerably affect the search for alternatives where novel & untried means may be looked for & adopted to achieve objectives in an exceptional manner

4. Variability in Decision Making:  Given an identical set of conditions, two decision makers may reach totally different conclusions  This happens due to variability in decision making  It suggests that every situation is unique & there are no set formulas that can be applied in strategic decision making

5. Person-related Factors in Decision-making:  There are a host of person related factors that play a role in decision making, such as- age, knowledge, intelligence, risk-taking ability & creativity 6. Individual vs Group Decision–making:  Owing to person related factors, there are individual differences among decision maker.  As organizations become bigger & more complex & face an increasingly turbulent environment, individuals come together in groups for the purpose of strategic decision making.