1. Business Management Process/System

2. Business - definition
An organization or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit. Businesses can be privately owned, not-for-profit or state-owned.
Business Management Process

3. Set of policies, practices, procedures, and processes used in developing and deploying strategies, their execution, and all associated management activity.
Business Management Process

4. Management – definition 1
The organization and coordination of the activities of a business in order to achieve defined objectives.
Management is often included as a factor of production along with machines, materials, and money. According to the management guru Peter Drucker ( ), the basic task of management includes both marketing and innovation. Practice of modern management originates from the 16th century study of low-efficiency and failures of certain enterprises, conducted by the English statesman Sir Thomas More ( ).
Management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling, and directing an organization's resources in order to achieve the objectives of that policy.
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5. Management – definition 2
The directors and managers who have the power and responsibility to make decisions and oversee an enterprise.
The size of management can range from one person in a small organization to hundreds or thousands of managers in multinational companies.
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6. Strategic Management Definition:
Strategic Management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its goals and objectives.
What is that strategic management?
Strategic management is a continuous process of strategic analysis, strategy creation, implementation and monitoring, used by organizations with the purpose to achieve and maintain a competitive advantage.
The general purpose of doing it is to combine the energy of organization’s functional areas into one focused effort to achieve superior performance. It is usually done through the many steps of the process.
Business Management Process

7. In essence, it answers the following 3 questions:
Where the organization is at the moment?
Where does it want to go?
How it will get there?
Strategic management is not about predicting the future, but about preparing for it and knowing what exact steps the company will have to take to implement its strategic plan and achieve a competitive advantage.
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8. The difference between strategic management and strategic planning
Both strategic management and strategic planning terms mean the same! The difference is that the latter one is more used in the business world while the former is used in the academic environment.
According to David,[1] strategic planning is sometimes confused with strategy formulation, because strategic plan is constructed in this stage.
1. David, F.R. (2009). Strat.Mgmt.: Concepts and Cases. 12th ed. FT Prentice Hall, p , 40, 48
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9. Importance of strategic planning
Requirement for sustained competitive advantage. Competitive advantage is what keeps great organizations ahead of their competitors. Rothaermel[2] pointed out that the company, which has a competitive advantage, performs financially much better than other companies in the industry or better than the industry average. Some companies may achieve it without thorough strategic plan but for the most players out there it is vital to plan strategically, i.e. analyze, create, implement and monitor, and do this continuously. It is not guaranteed that companies will ever achieve competitive advantage conducting strategic planning but it is an essential process if the company wants sustain it.
Business Management Process

10. Views things from broader perspective
Views things from broader perspective. The other reason why the organizations don’t simply rely on their finances, marketing or operations functional areas to create competitive advantage is that managers of each area often view things only from their own specific angle[3], which is too narrow view for the whole organization to rely upon. Only the managers (e.g. CEOs or strategic planners) who see the whole picture of the company and its surrounding environments can make the decisions that bring the competitive advantage.
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11. Facilitates collaboration
Facilitates collaboration. Nowadays, most companies involve middle managers of functional areas into the process of formulating strategic plan. Middle managers are the people who implement the strategies set out in a plan and if they aren’t involved in making the plan, then they aren’t so committed to support it.
Thus, strategic planning is used to achieve the competitive advantage and to integrate all the functional areas of the company by facilitating the communication between the managers of all levels.
Business Management Process

12. Benefits of Strategic Planning
Defines a company’s vision, mission and future goals.
Identifies the suitable strategies to achieve the goals.
Improves awareness of the external and internal environments, and clearly identifies the competitive advantage.
Increases managers’ commitment to achieving the company’s objectives.
Improves coordination of the activities and more efficient allocation of company’s resources.
Better communication between managers of the different levels and functional areas.
Reduces resistance to change by informing the employees of the changes and the consequences of them.
Strengthens the firm’s performance.
On average, companies using strategic management are more successful than the companies that don’t.
Strategic planning allows the organization to become more proactive than reactive.
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13. Limitations
Although strategic management brings many benefits to the company it also has its limitations:
The costs of engaging in it are huge.
The process is complex.
Success is not guaranteed.
Above are the reasons why small and medium enterprises are usually reluctant to have their own strategic departments.
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14. Strategic Management
Strategic management involves formulation and implementation of the major goals and initiatives taken by a company's top management on behalf of owners.
Strategic management is based on consideration of resources and an assessment of the internal and external environments in which the company competes.
The formulation of company strategy is a key managerial act.
The company strategy is absolute basis for all further decision making as planning, its execution and implementation of operational goals.
Underestimation of the existence of company strategy is a huge mistake of many managers.
Business Management Process

15. Importance of strategic planning
Basis of operational plans. Short term plans of any function (marketing, sales, purchasing, HR, IT/IS, Supply chain etc. ) is based on long term (strategic) plan.
Owners. The major focus of this group is gain of long term goals. They are not usually interested in short term gains.
Potential investors. Long and mid term goals defined by top management of the company are the key for the final decision of investors to invest into the company.
Banks. Long term loans are associated with long term goals – long term planning. Strategic plan is for bank primary document.
Current employees. Employees at all levels are interested about the future of the company as they want know what they can expect from their employer. Without a clear future is almost impossible to retain high potentials and talents (future leaders).
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16. Importance of strategic planning
Potential and new employees. New employees at all levels are looking for their complex remuneration, for their development, for their future career, for promotions, better benefits etc. All this is connected to the future of the company.
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17. Operational Management and Planning
Operational plans are crucial for the annual financial budget.
Most important part of operational plans is a description how to achieve set goals.
SMART goals (Specific, Measurable, Aligned, Realistic, Timely)
Tactical management tools as marketing mix, Incentive schemes, Product mix.
Operational plans are basis for P&L plan, CF plan and balance sheet plan.
Operational plans include goal setting, description of their implementation and monitoring tools.
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18. Controlling
Controlling. It is an important managerial function (like planning, organizing, staffing), because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in a desired manner.
reports and examples
Operational controlling
focus on the operational planning; quantitative parameters
Strategic controlling
focus on the strategic plan and strategic goals; qualitative parameters
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19. Risk Management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
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20. Role of the CEO (chief executive officer)
Must be an effective strategist and effective administrator as well
It is his responsibility to provide the framework and direction for overall company operations.
He must continually specify where the company will place its emphasis in terms of products, services, and customers.
He must define performance criteria and determine what special competences the company will emphasize.
He needs to set priorities and timetables.
He must establish the standards and controls necessary to monitor progress and to place limits on individual actions.
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21. Role of the CEO (chief executive officer)
Moreover, he must change his management style and strike different balances among his personal skills as conditions or as his organization grows in size and complexity.
The remedial role (saving the organization when it is in great difficulty) calls for drastic human action and emphasizes conceptual and technical skills.
The maintaining role (sustaining the organization in its present posture) emphasizes human skills and requires only modest technical or strategic changes.
The innovative role (developing and expanding the organization) demands high competence in both conceptual and intergroup skills, with the technical contribution provided primarily by subordinates.
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22. Next time Strategic plan Mission and Vision formulation
Managerial strategy:
Marketing strategy
Sales strategy
Personnel strategy
Quality and innovation strategies
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