Nature of Strategic Management powerpoint class notes
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Nature of Strategic Management powerpoint class notes Nature of Strategic Management powerpoint class notes Presentation Transcript

  • AGENDA 09/09 & 09/10
    • Nature of Strategic Challenge &
      • Strategic Management
    • The Strategy Concept and Process
    • Strategic Plan - Team Meetings
  • Strategic Challenge
    • To survive
    • To grow
    • To die
  • In order to survive and to prosper (meet the strategic challenge) every organization must:
    • Develop and maintain an alignment with the environment
    • Create the future
    • Define and grow
    • Internal Competencies
  • Meeting the Strategic Challenge
  • 1950s
    • Finding a profit-producing match between products/services of the organization and the needs of the market.
  • 1960s
    • Transforming the internal structure and competencies of the organization.
  • 1970s & 1980s
    • Planning interfaces with suppliers because of limited resources.
    • Acknowledging power of society/environment to impact an organization.
    • Recognizing the global nature of competition.
  • 1990s
    • Realizing that the speed of change is often greater than the speed of strategic response.
    • Focusing competitive advantage on information.
  • 2000s
  • Arenas that need to be addressed if the organization is to meet the strategic challenge
    • Products/Services
    • Competencies
    • Inputs
    • Society
    • Globalization
    • Change
    • Information
    • Future
  • What is Strategic Management?
  • Early Definition
    • Determination of basic long-term goals and objectives
    • Adoption of courses of action
    • Allocation of resources necessary for carrying out these goals
    • Chandler, A. 1962. Strategy & Structure: Chapters in the History of the Industrial Enterprise , Cambridge: M.I.T. Press, p.13
  • Another way of saying it
    • Art and Science
    • Formulating, Implementing, and Evaluating
    • Cross-Functional Decisions
    • Enabling an Organization
    • To set and achieve its
    • Mission and Objectives
    Mission Objectives Decisions Actions Environmental Scanning Evaluation
  • Art and Science
    • Intuition (art)
      • past experiences, judgment, feelings
      • particularly useful for making decisions in situations of great uncertainty or little precedent.
    • Analysis (science)
      • logical, systematic approach
      • organization of quantitative information/data to be used for decision making.
  • Emphasis of Strategic Management
      • What is Value?
      • Multimarket scope
        • product, geographic, and vertical boundaries
      • Management of activities and businesses within company
  • Strategic Management is a Process
    • Process: flow through interrelated stages toward the achievement of an aim
    • The flow of information involves historical, current, and forecasted data on the environment and operations of an organization.
    • Never finished.
  • Implications of viewing Strategic Management as a Process
    • Inter-relatedness
      • A change in one part affects several others
    • Formulation and Implementation are often interwoven
    • Allowance for continuous feedback and updates
    • Communication & Commitment
  • Strategic Management
    • involves long-term, future-oriented, complex decision making
    • requires considerable resources
    • participation at all levels of an organization
      • Top management is essential
  • Specifics
  • I. Strategy Formulation
    • 1. Developing a business vision/mission
      • Mission = enduring statements of purpose that distinguish one business from other firms.
    • 2. Establishing long-term objectives
      • Specific results - more than one year.
      • Challenging, measurable, reasonable, clear.
      • Established for overall corporation and each division
    • 3. Identifying external opportunities and threats...could benefit or harm an organization in the future.
      • Macro Environment
      • economic, social, cultural, demographic, environmental, political, legal, governmental, and technological
      • largely beyond the control of the organization
      • Micro Environment
      • Industry
      • Competitive trends & events
    • 4. Determining internal strengths and weaknesses
      • Controllable activities within an organization that are performed especially well or poorly.
      • Competencies (skills)
      • Functional activities are areas where strengths or weaknesses arise.
  • Strategy Formulation Con’t
    • 5. Generate and choose corporate strategies
      • Means by which long-term objectives will be achieved.
  • II. Strategy Implementation
    • Establish annual objectives
      • Short-term milestones that organizations must achieve to reach long-term objectives.
      • Measurable and established at corporate, business, and functional levels.
    • Devise policies
      • Guidelines, rules, procedures
    • Structure alignment
    • Mobilizing all functions to put formulated strategies into action.
  • III. Strategy Evaluation
    • Assess the outcomes of formulation and implementation.
    • Three fundamental activities
      • reviewing external and internal factors
      • measuring performance
      • taking corrective actions
  • Who uses Strategic Management
    • Profit
      • Big Corporations
      • Medium Size Corporations
      • Small Businesses
    • Government
    • Nonprofit
    • Individual Career Management
    • Levels of FORMALITY will vary
  • When is Corporate Strategy Practiced?
    • Real Time
    • Always
  • Where in Larger Organizations is Strategic Management Practiced?
    • Corporate Level
      • Board of Directors; CEO; Administrative Officers
      • Determine mission; set objectives and strategies
    • Business Level
      • How Firm will compete in selected product/market arenas
    • Functional Level
      • Execute the plans