My ppt @ becdomson introduction to management
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My ppt @ becdomson introduction to management

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My ppt @ becdomson introduction to management

My ppt @ becdomson introduction to management

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My ppt @ becdomson introduction to management My ppt @ becdomson introduction to management Presentation Transcript

  • Introduction to Strategic Management
  • Lecture Objectives
    • By the end of this lecture, students should be able to:
      • Explain the functions of management
      • Define and explain strategy and strategic management
      • Explain why strategic management is important
      • Explain the strategic management process
      • Describe the levels of organizational strategies
      • Discuss the misconceptions about strategy and strategic management
  • OBJECTIVE #1 Functions of Management
    • Planning, Organizing, Leading; & Controlling (PLOC)
    • Planning
      • defining goals and objectives
      • deciding what type of activities the company will engage in
      • determining the resources needed to achieve the organization’s goals & objectives.
  • Functions of Management
    • Leading
      • Attracting people to the organization.
      • Specifying job responsibilities
      • Grouping jobs into work units
      • Marshalling and allocation of resources
      • Creating good working conditions
  • Functions of Management
    • Organizing
      • Directing, motivating, and communication with employees, individually & in groups.
      • Conflict resolution.
    • Controlling
      • Monitoring performance of people & units.
      • Provision of feedback or information about progress.
      • Identification of performance problems & actions to correct problems.
  • Disciplinary Focus
    • Various disciplines in “management” emerge from the functions of management:
      • Business Policy (formally called Strategic Planning ) from the planning function.
      • Organizational Behavior primarily from the leading function.
      • Human Resources Management primarily from the organizing function.
      • Strategic Management , originated from Business Policy, but focuses on overall management – PLOC – and beyond .
  • OBJECTIVE #2 What’s Strategy?
    • Strategy is management’s overall plan and actions for deploying resources and skills taking into consideration opportunities and threats in the environment
      • to achieve it’s mission, vision and objectives
      • to establish a favorable competitive position .
    • Strategy involves:
      • An organization’s goals
      • A series of related decisions & actions
      • Takes into account key internal strengths & weaknesses and external opportunities threats
      • Analysis, communication, coordination, & action
  • What is Strategic Management?
    • Focuses on how managers formulate and implement, and evaluate strategies aimed at developing and maintaining competitive advantage :
      • the reason some firms enjoy higher levels of performance than their rivals or competitors .
    • Strategic management is therefore concerned with overall PLOC
    • Four aspects that set strategic management apart:
      • Interdisciplinary
      • External focus
      • Internal focus
      • Future directions
    “ Big picture” view of an organization influenced by its external environment
  • Strategic Management’s Uniqueness
    • Field of Study
      • Macroeconomics
      • Microeconomics
      • Strategic Management
      • Finance
      • Marketing
      • Org. Behavior
      • Human Resource Mgmt.
      • Operations Mgmt.
    • Level of Analysis
      • The economy
      • Industries & markets
      • Firms & businesses
      • Investment Projects
      • Products & services
      • Individuals & Groups
      • Tasks & Structure
      • Plants
  • OBJECTIVE #3 Importance of Strategic Management
    • Gives every employee a role to play in making the firm successful
      • Applies to all professional employees, not just those in management
      • Allows decision-making, allocation of resources and management of people to be based on a firm’s strategic plan
      • Success as a manager (as measured by your promotion, job security, and pay increases) is often determined by your efforts & departments contribution to overall organization’s success
    • Makes a difference in performance levels
      • Research suggest that successful companies use strategic management concepts & techniques
      • Success evolves from “knowing what you’re doing” and often implies having a strategic plan
  • Importance of Strategic Management
    • Provides systematic approach to uncertainties that organizations face
      • Competitive & global environment are dynamic (changing)
      • Change, whether significant of minor, must be recognized and analyzed, & dealt with
      • Strategic management allows for the analysis of the situation (identifying the sources of change in environment)
    • Coordinates and focuses employees to achieve organization’s goals
      • Allows for team effort which is coordinated for firm success
      • Allows for development of a plan, communication, coordination, & cooperation among diverse depts & functions
  • OBJECTIVE #4 Strategic Management Process
    • Establishing a mission, vision and objectives
    • Environmental Analysis
    • Internal Analysis
    • Strategy Formulation
    • Strategy Implementation
    • Strategic Control and Performance Evaluation
  • The Strategic Management Process Mission, Vision & Objectives Internal Analysis Environ. Analysis Strategy Formul- ation Strategy Implem- entation Strategic Eval. & Control
  • Mission, Vision & Objectives
    • A company’s mission is a statement of
      • the basic purpose or reason for its existence
      • its values (role to stakeholders - customers, employees, society, etc.).
    • The vision goes beyond the mission statement
      • clarifies the long-term direction of the company (where the company is going)
      • reflects management’s aspirations for the company
  • Mission, Vision & Objectives
    • Objectives are yardsticks for tracking a company’s performance or end result.
      • Financial performance objectives (e.g., ROA, ROI, ROE, Dividend growth, Stock price, etc.).
      • Strategic performance objectives (e.g., market share, growth, innovation leader, customer service, community & environmental responsibility, etc.)
  • Examples of Mission & Vision
    • Southwest Airlines:
      • Mission : To provide high quality service at a lower price in the airline industry.
      • Vision : Opening air travel to a wider group of leisure travelers while infusing the organization with a sense of fun.
    • Apple Computer:
      • Mission : To bring the best personal computing products and support to consumers around the world.
      • Vision : One person, one computer.
  • Financial & Strategic Objectives
    • Alcan Aluminum
      • Financial : To outperform the average return on equity of the S&P’s industrial stock index.
      • Strategic : To be lowest-cost producer of aluminum.
    • GE
      • Financial : To achieve an average of 10 inventory turns and a corporate operation profits margin of 16% by 1998.
      • Strategic : To become most competitive enterprise in the world by being #1 or #2 in market share in every business the company is in.
  • Environmental Analysis
    • Involves the evaluation of the business environment of the organization.
      • All external influences that impact a company’s decision and performance.
    • Environment of firm classified by proximity into
      • (1) Macro-environment; and
      • (2) Micro-environment or task environment.
  • Environmental Analysis
    • The macro-environment consists of
      • The international/national economy; changes in demographic structures; social and political trends; technology; and the natural environment.
    • The micro-environment consists of
      • The industry environment such as competitors, suppliers, customers; unions and employees; owners and shareholders, etc.
  • Internal Analysis
    • Involves the evaluation of the inventory of the firm’s resources and capabilities.
    • Resources/Capabilities can be classified as:
      • Tangible resources: Financial or physical assets
      • Intangible resources: brand name, reputation (product & firm), organizational culture, etc.
      • Capabilities or competencies: managerial ability, specialized skill & knowledge base of employees, etc.
  • Strategy Formulation
    • The strategy formulation process
      • involves designing a course of action for addressing strategic issues facing the firm after going through the external and internal evaluation processes.
    • Actual strategy of a company involves:
      • Planned or Intended Actions (Deliberate & purposeful actions).
      • Reactive or Emergent Actions (As-need reactions to unanticipated events in firm’s micro and macro environments).
  • Strategy Formulation
    • Strategy formulation is concerned with the following parts of a company:
      • Corporate (whole company) -- Corporate strategies: Deals with businesses company wants to be in & how to manage those businesses
      • Businesses -- Competitive strategies: How to compete in specific business or industry
      • Functional areas -- Functional strategies: short goal-directed decisions & actions of an organization’s various functional departments.
  • Strategy Implementation
    • Strategy implementation is the process of putting a company’s various strategies into action
      • development of programs, policies, budgets & procedures.
    • It can take several months to years to complete.
    • Most difficult part of the strategy process.
    • The job of implementing strategy involves managers at all levels
  • Strategic Control & Evaluation
    • Process by which desired outcomes (mission, vision, & objectives) are compared with realized outcomes to determine if there are gaps.
    • Initiate corrective actions by monitoring changes in environment - competitor actions, new market opportunities, customer needs & expectations.
  • Strategic Management Process
    • On-going and continuous cycle of
      • Situation Analysis : Internal evaluation & Environmental scanning
      • Strategy formulation
      • Strategy implementation
      • Strategy evaluation
  • Misconceptions about Strategy & Strategic Management
    • Strategy & strategic planning are dead
      • Every organization needs the focus and direction provided by its strategies and the strategic management process
    • Strategy is strictly for top management
      • Top management play a crucial role, but everyone in the organization has a part to play.
    • Strategy is about planning
      • Strategic management process shows that strategy is not only about planning, but also about doing.
  • Misconceptions about Strategy & Strategic Management
    • Strategy is stable and constant
      • Organizations compete in dynamic environments. Flexibility and change needed to respond to environmental opportunities & threats, & strength and weaknesses
    • Strategic management outlines ultimate destination & route
      • It establishes a systematic approach to analyzing relevant information & using it to design, implement, & evaluate appropriate strategies.