Facet of Strategic management

Facet#1: The Social Facet. ## The facet of the environment of human relationships that organizations have with individuals with groups and with society in general. The Social Facet involves ethical and moral considerations and responsibilities that strategic managers/organizations have because of their humanity and not because of any legal, economic or political pressures. This element of the environment analysis includes social contract between the organization and the people. The element of social contract highlights the pressure of fiduciary (based on trust) responsibility that organization has to the society. Facet#2: The Political Facet. ## The political facet of the environment consists of laws and regulation applicable to the enterprise. The modern day business are characterized has by increased diversity in nature and completely in functions. Among all the elements applied by the society on businesses for managing such complexities, enactment of law and regulations is foremost. The modern day strategic managers are facet with too many laws rather than too few laws. Therefore, the increasing burden of law is concern to every strategic manager. Facet with resource constraints a successful Strategic manager needs to avoid both over compliance and under compliance in respect of laws and regulations. Over compliance has economic cost under compliance has both economic and social costs. Another important responsibility of the strategic managers is to manage the legislations process through encouraging the enactment of favorable legislations and discouraging or preventing unfavorable legislations. What constitutes favorable or unfavorable is interpreted from public interest perspective. Facet#3: The Economic Facet. ## A business entity is above all an economic entity. It has as the goal the production of good and services at the lowest possible cost, keeping the quality intact and in accordance with the needs and desires of the society. Because it is the society on whom the businesses depend for long term support. In order to be successful in the long run the strategic managers need to perform, cost benefit analysis on a continuous basis in order to justify the use of scare economic resource. Such analysis includes the followings: sources of capital, product and service markets, demand for goods and services, opportunities for growth and changes and trends in the economy. ## The following statements highlight the historical important of the economic facet: Adam Smith (1776): It entrepreneurs seek their own best economic invests, society will benefit. Milton Friedman (1962): The only social responsibility of business is to earn profit within the rules of the game.

Facet#4: The Technological Facet. ## Technology is defined as the science of application of knowledge for achieving useful purposes. The current business environment is characterized by the use of rapidly advancing technology. To survive today, business must continuously innovate in order to respond effectively to the changed social demands. Strategic mangers have to realize that technological innovation is very much possible and in a tree market economy someone will attempt it. The company which does and succeeds. In producing a better product at the same cost or the same product at a lower cost shall ultimately control the market. Since technological innovation is a costly exercise, the strategic managers will do well to identify relevant and timely. Innovation for the business and its market. Another important responsibility of the strategic managers in the market of cost control is to achieve technological flexibility. This implies that the same technology or every little change of existing technology can be used respond effectively to changed circumstance. Boris Petron (1982) described the following effects of technological change: 1) It can change relative competitive cost position within a given business or industry. 2) It can create new market and new business segment. 3) It can change previously independent business by reducing or eliminating segmented cost business. Facet#5: The Ecological Facet: ## As Strategic Managers fours on the future, one of the most prominent factors in the remote environment is often the reciprocal relationship between business and ecology. The term ecology refers to the relationship among human beings and other living things and the air, soil, water that supports them. Threats to our life supporting ecology caused principally by human activities in an industrial society are Connolly referred to as pollution. Specific concerns include global warming loss of habitat and biodiversity, as well as air, land and water pollution. The modern day business is increasingly becoming complex, especially in the contest of adverse impact on its surroundings. The society in general is largely unaware of such adverse effects of the products and services of the enterprise. It is part of the fiduciary responsibility of the strategic managers to reduce such impact to minimum by taking timely and appropriate measures as well as communicate relevant information to the affected society.

Strategic Management And Mission Statement:

## An important part of strategy formulation process is the development of mission statement. The important of mission to good and effective strategic arrangement is well documented in the literature. It is widely accepted that organizations carefully develop their mission statement for the following reasons: 1) 2) 3) 4) 5) To ensure unanimity of purpose within organization. To provide a basis or standard for allocating organizational resources. To establish a general tone of the organizational climate. To serve as a focal point for individuals to identify with organizational purpose directions. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization.