POLICY vs STRATEGY  <ul><li>POLICY STUDIES </li></ul><ul><li>INTERNAL FOCUS </li></ul><ul><li>EMPHASIZES EFFICIENCY OF OPE...
THE FOUR PHASES OF STRATEGIC PLANNING <ul><li>1--BASIC FINANCIAL PLANNING  (Budgeting)  </li></ul><ul><li>Seek better cont...
STRATEGIC PLANNING <ul><li>Any organization that doesn’t plan for the future isn’t likely to have one. </li></ul><ul><li>P...
TRIGGERING EVENTS FOR STRATEGIC CHANGE <ul><li>SIGNIFICANT PERFORMANCE GAPS </li></ul><ul><li>CHANGES IN OWNERSHIP </li></...
THE BASIC MODEL OF STRATEGIC MANAGEMENT <ul><li>1-- ENVIRONMENTAL SCANNING </li></ul><ul><ul><li>EXTERNAL ENVIRONMENT </li...
THREE STRATEGIC LEVELS <ul><li>CORPORATE-LEVEL STRATEGIES </li></ul><ul><li>Are long-term  investment  strategies </li></u...
TESTS FOR A WINNING STRATEGY THOMPSON & STRICKLAND <ul><li>GOODNESS-OF-FIT </li></ul><ul><li>HOW WELL IS THIS STRATEGY MAT...
FIVE CRITICAL STRATEGIC QUESTIONS HAMBRICK & FREDERICKSON <ul><li>ARENAS: </li></ul><ul><li>WHERE WILL WE BE ACTIVE?  …WHI...
IMPLEMENTATION <ul><li>FINDING A GOOD “ FIT ” BETWEEN STRATEGY AND …. </li></ul><ul><li>-- ORGANIZATIONAL CAPABILITIES </l...
WE IMPLEMENT STRATEGY BY: <ul><li>--  BUILDING AN ORGANIZATION ( STRUCTURE ) CAPABLE OF SUCCESSFULLY SUPPORTING AND CARRYI...
MYTHS OF CORPORATE PLANNING ACKOFF 81 <ul><li>MOST  CORPORATE PLANNING  IS LIKE A RITUAL RAIN DANCE, </li></ul><ul><li>IT ...
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INTRO TO STRATEGIC MANAGEMENT AND PLANNING

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INTRO TO STRATEGIC MANAGEMENT AND PLANNING

  1. 1. POLICY vs STRATEGY <ul><li>POLICY STUDIES </li></ul><ul><li>INTERNAL FOCUS </li></ul><ul><li>EMPHASIZES EFFICIENCY OF OPERATIONS </li></ul><ul><li>STRATEGIC STUDIES </li></ul><ul><li>EXTERNAL FOCUS </li></ul><ul><li>EMPHASIZES ADAPTING TO A CHANGING ENVIRONMENT </li></ul><ul><li>“ SEAT-OF-THE-PANTS ” MANAGEMENT = Intuitive Management </li></ul><ul><li>We must move away from intuitive approaches as: </li></ul><ul><li>THE ORGANIZATION BECOMES LARGER … </li></ul><ul><li>THE LAYERS OF MANAGEMENT INCREASE … </li></ul><ul><li>THE ENVIRONMENT BECOMES MORE COMPLEX . </li></ul>
  2. 2. THE FOUR PHASES OF STRATEGIC PLANNING <ul><li>1--BASIC FINANCIAL PLANNING (Budgeting) </li></ul><ul><li>Seek better control by emphasizing the meeting of budgets </li></ul><ul><li>Focus is internal </li></ul><ul><li>2--FORECAST-BASED PLANNING </li></ul><ul><li>Plan for growth by trying to predict the future beyond next year </li></ul><ul><li>Predicting and forecasting the environment </li></ul><ul><li>3--EXTERNALLY-ORIENTED (Strategic) PLANNING </li></ul><ul><li>Responding and reacting to market shifts and competitor actions </li></ul><ul><li>Environmental reaction </li></ul><ul><li>4--STRATEGIC MANAGEMENT </li></ul><ul><li>Developing a competitive advantage which creates your future </li></ul><ul><li>Environmental proaction </li></ul>
  3. 3. STRATEGIC PLANNING <ul><li>Any organization that doesn’t plan for the future isn’t likely to have one. </li></ul><ul><li>Planning without action is futile, but action without planning is fatal. </li></ul><ul><li>STRATEGIC PLANNING </li></ul><ul><li>FORCES MANAGERS TO THINK ANALYTICALLY </li></ul><ul><li>FOCUSES ATTENTION ON THE FUTURE OF THE FIRM </li></ul><ul><li>INCREASES UNDERSTANDING OF THE ENVIRONMENT </li></ul><ul><li>DEVELOPS ABILITY AND OUTLOOK OF MANAGERS </li></ul><ul><li>IS A BASIS FOR PERFORMANCE EVALUATION AND ASSESSMENT </li></ul><ul><li>Three most highly rated benefits: </li></ul><ul><li>CLEARER SENSE OF THE STRATEGIC VISION OF THE FIRM </li></ul><ul><li>SHARPER FOCUS ON WHAT IS STRATEGICALLY IMPORTANT </li></ul><ul><li>IMPROVES UNDERSTANDING OF THE CHANGING ENVIRONMENT </li></ul>
  4. 4. TRIGGERING EVENTS FOR STRATEGIC CHANGE <ul><li>SIGNIFICANT PERFORMANCE GAPS </li></ul><ul><li>CHANGES IN OWNERSHIP </li></ul><ul><li>CHANGES IN LEADERSHIP—A NEW CEO </li></ul><ul><li>INTERVENTION BY A SIGNIFICANT EXTERNAL ENTITY </li></ul><ul><li>STRATEGIC INFLECTION POINT </li></ul><ul><li>IN GENERAL, ANY CHANGES, CRISES, OR DEVIATIONS FRO THE EXPECTED OR STATUS QUO </li></ul>
  5. 5. THE BASIC MODEL OF STRATEGIC MANAGEMENT <ul><li>1-- ENVIRONMENTAL SCANNING </li></ul><ul><ul><li>EXTERNAL ENVIRONMENT </li></ul></ul><ul><ul><ul><li>Opportunities and Threats </li></ul></ul></ul><ul><ul><li>INTERNAL ORGANIZATION </li></ul></ul><ul><ul><ul><li>Strengths and Weaknesses </li></ul></ul></ul><ul><li>2-- STRATEGY FORMULATION </li></ul><ul><ul><li>DEVELOPING A MISSION/VISION </li></ul></ul><ul><ul><ul><li>Who are we? What is our business? Where are we headed? </li></ul></ul></ul><ul><ul><li>SETTING OBJECTIVES </li></ul></ul><ul><ul><ul><li>Financial Objectives – Earnings, ROA, Cash Flow </li></ul></ul></ul><ul><ul><ul><li>Strategic Position Objectives – Market Share, Customer Service, Competitive Position </li></ul></ul></ul><ul><ul><li>CRAFTING STRATEGIES </li></ul></ul><ul><ul><ul><li>How to achieve the targeted results?…What is our strategic plan? </li></ul></ul></ul><ul><ul><ul><li>Corporate, Business-level, Functional </li></ul></ul></ul><ul><li>3-- STRATEGY IMPLEMENTATION </li></ul><ul><ul><li>ESTABLISHING PROGRAMS, BUDGETS, AND PROCEDURES </li></ul></ul><ul><ul><li>ASSIGNMENTS </li></ul></ul><ul><ul><ul><li>Who does what by when? </li></ul></ul></ul><ul><li>4-- EVALUATION AND CONTROL </li></ul><ul><ul><li>MONITORING, REVIEW, AND INTERVENTION </li></ul></ul><ul><ul><ul><li>When should we intervene? </li></ul></ul></ul>
  6. 6. THREE STRATEGIC LEVELS <ul><li>CORPORATE-LEVEL STRATEGIES </li></ul><ul><li>Are long-term investment strategies </li></ul><ul><li>Is the corporate mission/vision well-served by continuing in this business? </li></ul><ul><li>Seek a favorable portfolio of business activities for the corporation GROWTH </li></ul><ul><li>STABILITY </li></ul><ul><li>RETRENCHMENT </li></ul><ul><li>BUSINESS-LEVEL (Divisional) STRATEGIES </li></ul><ul><li>Are competitive strategies for each business segment the company operates in </li></ul><ul><li>How to improve the relative market position of each product/service line? </li></ul><ul><li>Emphasize development of a competitive advantage for each business line </li></ul><ul><li>COST LEADERSHIP </li></ul><ul><li>DIFFERENTIATION </li></ul><ul><li>FOCUS </li></ul><ul><li>FUNCTIONAL-LEVEL (Departmental) STRATEGIES </li></ul><ul><li>Are departmental strategies that focus on resource utilization and efficiency </li></ul><ul><li>Develop efficiency plans that are in harmony with higher-level objectives </li></ul>
  7. 7. TESTS FOR A WINNING STRATEGY THOMPSON & STRICKLAND <ul><li>GOODNESS-OF-FIT </li></ul><ul><li>HOW WELL IS THIS STRATEGY MATCHED TO THE ORGANIZATION’S CAPABILITIES AND ASPIRATIONS? </li></ul><ul><li>COMPETITIVE ADVANTAGE </li></ul><ul><li>DOES THIS STRATEGY LEAD TO A SUSTAINABLE COMPETITIVE ADVANTAGE? </li></ul><ul><li>DOES THIS STRATEGY STRENGTHEN OUR COMPETITIVE POSITION? </li></ul><ul><li>PERFORMANCE </li></ul><ul><li>IS PROFITABILITY ENHANCED? </li></ul><ul><li>ARE LONG-TERM GAINS REALIZED IN STRATEGIC-POSITION AND IN FINANCIAL AREAS? </li></ul>
  8. 8. FIVE CRITICAL STRATEGIC QUESTIONS HAMBRICK & FREDERICKSON <ul><li>ARENAS: </li></ul><ul><li>WHERE WILL WE BE ACTIVE? …WHICH AREAS? </li></ul><ul><li>VEHICLES: </li></ul><ul><li>HOW WILL WE GET THERE? </li></ul><ul><li>DIFFERENTIATORS: </li></ul><ul><li>HOW WILL WE WIN IN THE MARKETPLACE? </li></ul><ul><li>STAGING: </li></ul><ul><li>HOW FAST CAN WE DO IT… AND IN WHAT SEQUENCE? </li></ul><ul><li>ECONOMIC LOGIC: </li></ul><ul><li>WHAT RETURN CAN WE EXPECT… AND WHEN WILL WE GET IT? </li></ul>
  9. 9. IMPLEMENTATION <ul><li>FINDING A GOOD “ FIT ” BETWEEN STRATEGY AND …. </li></ul><ul><li>-- ORGANIZATIONAL CAPABILITIES </li></ul><ul><li>-- THE REWARD STRUCTURE </li></ul><ul><li>-- INTERNAL POLICIES AND PROCEDURES </li></ul><ul><li>-- THE ORGANIZATION’S CULTURE </li></ul>
  10. 10. WE IMPLEMENT STRATEGY BY: <ul><li>-- BUILDING AN ORGANIZATION ( STRUCTURE ) CAPABLE OF SUCCESSFULLY SUPPORTING AND CARRYING OUT THE STRATEGY </li></ul><ul><li>-- DEVELOPING BUDGETS THAT STEER RESOURCES INTO CRITICAL INTERNAL ACTIVITIES </li></ul><ul><li>-- MOTIVATING PEOPLE TO PURSUE TARGETED OBJECTIVES ENERGETICALLY </li></ul><ul><li>-- TYING REWARDS TO ACHIEVEMENT OF TARGETED RESULTS </li></ul><ul><li>-- CREATING A WORK ENVIRONMENT CONDUCIVE TO SUCCESSFUL IMPLEMENTATION OF STRATEGY </li></ul><ul><li>-- INSTALLING STRATEGY-SUPPORTIVE POLICIES AND PROCEDURES </li></ul><ul><li>-- DEVELOPING AN INFORMATION REPORTING SYSTEM TO TRACK PROGRESS AND MONITOR PERFORMANCE </li></ul><ul><li>-- EXERTING INTERNAL LEADERSHIP TO DRIVE IMPLEMENTATION FORWARD </li></ul>
  11. 11. MYTHS OF CORPORATE PLANNING ACKOFF 81 <ul><li>MOST CORPORATE PLANNING IS LIKE A RITUAL RAIN DANCE, </li></ul><ul><li>IT HAS NO EFFECT ON THE WEATHER THAT FOLLOWS, BUT IT MAKES THOSE WHO ENGAGE IN IT FEEL THAT THEY ARE IN CONTROL. </li></ul><ul><li>MOST DISCUSSIONS OF THE ROLE OF MODELS IN PLANNING ARE DIRECTED AT IMPROVING THE DANCING, NOT THE WEATHER. </li></ul><ul><li>IMPLICATIONS: </li></ul><ul><li>DON’T FOCUS EXCLUSIVELY ON THE PROCESS… </li></ul><ul><li>KEEP AN EYE ON RESULTS! </li></ul><ul><li>IS THERE PROOF THAT THINGS ARE IMPROVING? </li></ul>
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