By:

Ali Bayani Kooshan Gholami Mehdi Farimani

Sharif University of TechnologyStrategy Management (Dr. Kermanshah)

Managing the strategy process

Pars Caravansary tourism development company

Rest area chain Study, design, construct and operate rest areas

across Iran More than 5000 employees More than 10 rest areas Main goal of the company is profitability

Managing the strategy process

The strategy planning Objectives setting Strategic programming budgeting

The monitoring, control and learningThe incentives and staffing system

Objectives setting

Determine a strategic direction for the firm No differentiating between objects and goals Consolidate with the strategic intent in long-run More enduring challenge

LINKAGE ORGANIZATIONAL LEVELS AND STEPS

IN STRATEGIC PLANNING

Organizational levels in Pars Caravansary Top management:

The main office in Tehran Divisions:

Each of rest areas is an independent division Business units

Each profitable elements in any division Restaurant Gas station Motel

Functions Accounting Procurement Storing Cleaning the environment

Objective setting Vision of top management

Forecast on key environmental factors Exchange rates Inflation Economic factors

Objective setting

Negotiation Divisions Business units

Top-down model Subordinate invitation

Objective setting

Negotiation Acceptance Check consistency resources Modification

Objective setting

Functional departments Supporting role Not having profit or growth responsibility Their goals will be decided in the second step Inviting key functional managers in object setting step

Objective setting

Evaluation on an overall basis No Judge in isolation

Fit with the rest of the portfolio Competing investment opportunities

Objective setting

Strategic programming

Develops the strategic objectives Define the cross-functional programs Long-run financial plan

overlays both the expenditures and revenues funded the firm’s internally generated resources or externally

financed resources

Two purpose: Forge an agreement between divisional ,business unit and

functional managers Deepen the involvement of functional managers

Strategic programming

Start with a communication from top management Identifying program alternatives by BU and

functional managers in each division Examples of strategic programs:

Increasing market share for an existing product Introducing a new product Launching a join marketing campaign for a family of products

Strategic programming

A key challenge for divisional and Business unit managers:

Deepen the involvement of functional managers :

Different professional cultures in functions Day to day functional activities

Strategic programming

Synergy promotion in firms:1. Economy of scale

R&D Procurement Production distribution

2. Economy of scope1. Development of a common trademark2. Development of complementary product or services3. Common regional service organization

Strategic programming

Corporate level: Estimate the needed resources Reassessing the goals and their supporting

strategies Modifying the programs Communicate the approves strategic programs to

the division business units and functions

Strategic programming

Budgeting Strategic budgets:

identifying the contributions that firm’s functional department will be expected to make

Operating budgets: allocation of resources to financial departments

Allocation of firm’s resources Human resource Technological resources Financial resources

Influence of allocations(operational budgets) on strategic budgeting

Budgeting

Budgeting

Strategic budget+ operational budget Sent to top management for approval

Strategy implementation

The monitoring , control and learning

Emphasis on budget and schedules These programs are validated periodically

The incentives and staffing systems Reward Key managerial positions

Thanks for your attention ;)