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[ ] Intro.ppt [ ] Intro.ppt Presentation Transcript

  • Introduction to Strategic Management Strategic Management (BA 491) Strategic Imperative
  • Strategic Management
    • Strategic management is the study of why some firms outperform others.
      • How to create a competitive advantage in the market place that is unique, valuable, and difficult to copy
    • “ Total organization” perspective, integrating across functional areas.
    • Two perspectives of leadership: romantic view and external control perspective.
    • Strategies put together an understanding of the external environment with an understanding of internal strengths and weaknesses.
  • Definition of Strategic Management
    • Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin, & Eisner, Strategic Management: Creating Competitive Advantage, 3rd Ed. , p. 9).
  • Definition of Strategic Management
    • Analysis
      • Strategic goals (vision, mission, strategic objectives)
      • Internal and external environment of the firm
    • Decisions
      • What industries should we compete in?
      • How should we compete in those industries?
    • Actions
      • Allocate necessary resources
      • Design the organization to bring intended strategies to reality
  • Attributes of Strategic Management
    • Directs the organization toward overall goals and objectives.
    • Includes multiple stakeholders in decision making.
    • Needs to incorporate short-term and long-term perspectives.
    • Recognizes trade-offs between efficiency and effectiveness.
  • Mintzberg’s Views of Strategy
    • Plan - consciously intended course of action
    • Ploy - maneuver to outwit opponent
    • Pattern - consistency in behavior
    • Position - location in environment
    • Perspective - way of perceiving the world
  • Forms of Strategy
    • Formal versus informal - associated with size of firm and stage of development. Mintzberg’s distinction between entrepreneurial and planning mode.
    • Intended versus realized - intended strategies are the plans managers develop; realized strategies are the actions that actually take place over time.
  • Forms of Strategy Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp. 257-72.
  • Strategic Management Process
    • Analysis
      • Hierarchy of goals
      • Analysis of external and internal environments
    • Formulation
      • What business(es) should we be in?
      • For each, what is the basis for competitive advantage (low cost, differentiation, focus)?
    • Implementation
      • Functional tactics
      • Culture and organization structure
  • Coherence in Strategic Direction
    • Company vision
    • Massively inspiring
    • Overarching
    • Long-term
    • Driven by and evokes passion
    • Fundamental statement of the organization’s
      • Values
      • Aspiration
      • Goals
    Company vision Hierarchy of Goals
  • Coherence in Strategic Direction
    • Mission statements
    • Purpose of the company
    • Basis of competition and competitive advantages
    • More specific than vision
    • Focused on the means by which the firm will compete
    Mission statements Hierarchy of Goals Company vision
  • Coherence in Strategic Direction
    • Strategic objectives
    • Operationalize the mission statement
    • Measurable, specific, appropriate, realistic, timely, challenging, resolve conflicts that arise, and yardstick for rewards and incentives
    Strategic objectives Hierarchy of Goals Company vision Mission statements
  • Levels of Strategy Corporate-level Functional-level Business-level
  • Does Strategic Planning Pay Off?
    • Original research showed mixed results. Planning might not pay off for firms in static or turbulent environments or for small firms.
    • Miller and Cardinal’s (1994) meta-analysis found that strategic planning affects firm growth and profitability. In particular, they found that:
      • Planning  performance link true for formal and informal planning.
      • Planning  performance link even stronger in turbulent environments.
      • Firm size unrelated to effectiveness of planning.