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The Importance of Management and Strategy in Today's Market

By Subi Chaturvedi, Director of Strategy, Public Policy and New Media at Hill+Knowlton Strategies India

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Subi Chaturvedi, Director of Strategy, Public Policy and New Media at Hill+Knowlton Strategies India

Management and Strategy in India has evolved changing from a snug tightly controlled management hierarchy to a branching tree structure taking it all the way into lower levels of management. The American way of management was introduced during the time of economic reforms in the 90s with the rush of MNCs into India. India liberalized and so did management styles in India. The presence of a head office outside the geographical boundaries of a country handling the overall decision making of the company brought about the key difference in the way companies operated. Technology became central from being a mere means to an end, expertise and the ability to navigate new spheres increasing efficiencies, optimizing resources became the new mantra. An office became a campus, a factory became a site and home became work with flex-time thrown in for good measure.

The chain of command got decentralized. Now authority is given but not without an equivalent responsibility. The IT Boom in the 2000s was another reason for the evolution of the Indian management structure. Strategic Management then became the key even in technology companies and the emphasis on attaining an MBA degree with a professional structured approach to change became an imperative. Strategies thus became a part of the Middle Level Management with the Top Level looking out for decision making and overseeing.

The management process has evolved over the years from being centralized, top down and authoritative to a distributed structure. More than 11,000 books are published each year in the United States alone on management and its allied disciplines. Planning, organizing, evaluating and monitoring, are the various additions to key management functions. Evolving out of the management process into a functional specialization in the field of consulting has become a necessity and is no longer a choice.

Strategy, a function that has been reserved for the top management finds its place now all the way down to the grape vine. Key studies reveal listening in and incorporating inputs and using the grapevine for feedback and information gathering for strategic management now as a best practice. Something which was unheard of, as recent as a decade earlier. Strategic management thus involves the formulation and implementation of the major goals and initiatives taken by the company's top management on behalf of the stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. Strategic Management not only gives a direction to the goals of the organization but also leads fulfillment of the objectives of the organization and the stakeholders.

The key difference between strategic management and planning is that a strategy is looked as a long term plan which not only involves forecasting but also ensuring optimum resources allocation. Planning on the other hand, can only be considered as involving the setting up of objectives for the future.

Strategic management activities transform a static plan into a system that provides performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. 

Thus, strategic management becomes essential not only for resource allocation but also to ensure optimum utilization of resources. The process of setting up of standards for evaluation for the purpose of performance measurement also comes out as a part of the strategic management process, this is now a critical part of change management processes globally and in India.

An ideal process of strategic management should assess the resources available and likely future environment. Evaluation of strategy and applying corrective measures is also necessary to ensure sound development & growth for the firm which comes at later stages of the strategic management process. It is important for the chosen strategy to not only be feasible but also provide the maximum results which is why evaluation is a key element of strategic management. Strategic Management thus is not only a process that helps in achieving short term objectives of a firm but also provides a safety net against the dynamic nature of the market. This is where strategic management consultancies bring in professional expertise.

The evolution of strategic management in India has seen specialized in-house departments evolving into various forms of strategic as well as risk management organizations offering various strategic thinking in all kinds of sectors to companies. By bringing in external expertise, the functions of strategic management, not only is a firm able to attain a neutral perspective away from the decision making clashes between the Top Management but also allows the firm to focus on its core services as well as measure the strategic challenges efficiently.

BCG, a leading private equity and risk management consultancy works towards strategizing for its clients by exploring growth strategies as well as analyzing the investment opportunities in large capital projects, new infrastructural needs or new technologies.

Not only has the role of consultancies increased the sectors they engage in, has also diversified. Consultancies are also engaging in sectors such as Energy, Infrastructure as well as service led sectors like Retail. The McKinsey Group in India has sought to provide strategic management skills to a leading grocery retailer that was suffering from stagnating growth and developed a strategic brand management approach towards ‘defining new store formats with clear, targeted customer value propositions. The work included redesigning the grocer's commercial offer and adapting relevant outlet features, such as store design, service levels, network configuration, and space allocation.  In case of a varied sector, McKinsey also provided its services to an Asian led infrastructure company that was facing the aftermath of the economic slowdown and supported the company in revising its five-year strategy to focus on three main thrusts: identifying strategic imperatives that would keep it ahead of the competition, diversifying risk by nurturing and growing new businesses internationally, and restructuring the organization for greater agility.

Other major consultancies in India have also stepped in towards providing strategic counseling on the financial strategic decisions taken by the firms and through the same it aims to integrate risk management with the overall strategic management of the firms. For Instance KPMG believes in ‘provision of an experience to help companies stay on track and deal with risks that could unhinge their business survival.’ Thus the present face of strategic management in India is diverse consisting of functions from Sustainability practices, Risk Management to taking corrective measures while evaluation of the progress of the strategy. This has allowed both the consultancies and the firms an ability to diversify its risks and deal with them proportionally and without disturbing any other departments.

The role of a strategic management consultant in India, has  evolved into not only systematically coordinating and aligning resources and actions with the mission, vision and strategy throughout an organization but also setting priorities, focusing energy and resources, strengthening operations and that employees and other stakeholders are working towards common goals.

A strategic management consultant thus looks into the planning and organizing process of the organization as well as the end functions of directing and controlling. The fundamental decision making around various stakeholders like competitors, clients, suppliers, the government as well as customers come out as a priority for strategic managers especially in a dynamic business environment as today.

With increasing global integration and spillover effects of one economy on the other, the role of the strategic advisor takes on a global level not just dealing with domestic market situations but also understanding the implications of the international markets on the same.

Strategic consultants have been creating value for organizations and now increasingly for governments as well. The future of the industry remains bright and will continue to grow as business ecosystems in India transform and business go transnational and sans borders.

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