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Every organization operates on a theory of Business. Strategy converts this theory of business into performance; its purpose is to enable an organization to achieve it's desired results in an unpredictable environment. A strategy allows an organization to be purposefully opportunistic. Strategy is also a test of the theory of the business.
Failure of the strategy to produce the expected result is usually the first serious indication that the theory of the business needs to be thought again and again.
Now-a-days strategic management is considered very important. It is involved in many of the decisions that Managers make. Most of the significant current business events reported in the various business publications involve strategic management. For example, the reports of business events such as proposed merger of multinational company are examples of managers making strategic decisions. Also one survey of business owners found that 69% has strategic plan and among those owners 89% responded that they found their plans to be effective. E.g., the strategic planning gave them specific goals and provided their staff with a unified vision, other studies of the effectiveness of strategic planning and management have found that, generally speaking, companies with formal strategic management system had higher financial returns1.
But before implementing strategy in domestic, as well as international market strategist should do the risk-benefit analysis or balanced-score card (BSC) analysis.
It is believed that organization which have used balanced scorecard (BSC) essentially offer four layered perspective of the state of strategic implementation. At the top layer is the financial perspective, which lays down the financial expectations of shareholders.
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1 Robbins. P. Stephen & Coulter Mary, Management, Prentice Hall, Inc. USA, 1996, pp. 256-257.
* Contributed by: -
Dr. R. P. Verma,
Ex. H.O.D. & Dean, Commerce and Business Management Dept.,
Arabinda Bhandari,
Strategic Management Researcher,
Ranchi University, Ranchi.
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