POLICY vs STRATEGYPOLICY STUDIES• INTERNAL FOCUS• EMPHASIZES EFFICIENCY OF OPERATIONSSTRATEGIC STUDIES• EXTERNAL FOCUS• EM...
THE FOUR PHASES OF STRATEGIC PLANNING1--BASIC FINANCIAL PLANNING (Budgeting)• Seek better control by emphasizing the meeti...
STRATEGIC PLANNINGAny organization that doesn’t plan for the future isn’t likely to have one.Planning without action is fu...
TRIGGERING EVENTS FOR STRATEGIC CHANGE• SIGNIFICANT PERFORMANCE GAPS• CHANGES IN OWNERSHIP• CHANGES IN LEADERSHIP—A NEW CE...
THE BASIC MODEL OF STRATEGIC MANAGEMENT1--ENVIRONMENTAL SCANNING   – EXTERNAL ENVIRONMENT       • Opportunities and Threat...
THREE STRATEGIC LEVELSCORPORATE-LEVEL STRATEGIES  Are long-term investment strategies  Is the corporate mission/vision wel...
TESTS FOR A WINNING STRATEGY                  THOMPSON & STRICKLANDGOODNESS-OF-FIT  HOW WELL IS THIS STRATEGY MATCHED TO T...
FIVE CRITICAL STRATEGIC QUESTIONS                   HAMBRICK & FREDERICKSONARENAS:  WHERE WILL WE BE ACTIVE? …WHICH AREAS?...
IMPLEMENTATIONFINDING A GOOD “FIT” BETWEEN STRATEGY AND ….-- ORGANIZATIONAL CAPABILITIES-- THE REWARD STRUCTURE-- INTERNAL...
WE IMPLEMENT STRATEGY BY:-- BUILDING AN ORGANIZATION (STRUCTURE) CAPABLE OF SUCCESSFULLY  SUPPORTING AND CARRYING OUT THE ...
MYTHS OF CORPORATE PLANNING                      ACKOFF 81MOST CORPORATE PLANNING IS LIKE A RITUAL RAIN DANCE,  IT HAS NO ...
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Policy vs strategic planning

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Transcript of "Policy vs strategic planning"

  1. 1. POLICY vs STRATEGYPOLICY STUDIES• INTERNAL FOCUS• EMPHASIZES EFFICIENCY OF OPERATIONSSTRATEGIC STUDIES• EXTERNAL FOCUS• EMPHASIZES ADAPTING TO A CHANGING ENVIRONMENT“SEAT-OF-THE-PANTS” MANAGEMENT = Intuitive Management We must move away from intuitive approaches as: THE ORGANIZATION BECOMES LARGER… THE LAYERS OF MANAGEMENT INCREASE… THE ENVIRONMENT BECOMES MORE COMPLEX.
  2. 2. THE FOUR PHASES OF STRATEGIC PLANNING1--BASIC FINANCIAL PLANNING (Budgeting)• Seek better control by emphasizing the meeting of budgets• Focus is internal2--FORECAST-BASED PLANNING• Plan for growth by trying to predict the future beyond next year• Predicting and forecasting the environment3--EXTERNALLY-ORIENTED (Strategic) PLANNING• Responding and reacting to market shifts and competitor actions• Environmental reaction4--STRATEGIC MANAGEMENT• Developing a competitive advantage which creates your future• Environmental proaction
  3. 3. STRATEGIC PLANNINGAny organization that doesn’t plan for the future isn’t likely to have one.Planning without action is futile, but action without planning is fatal.STRATEGIC PLANNING• FORCES MANAGERS TO THINK ANALYTICALLY• FOCUSES ATTENTION ON THE FUTURE OF THE FIRM• INCREASES UNDERSTANDING OF THE ENVIRONMENT• DEVELOPS ABILITY AND OUTLOOK OF MANAGERS• IS A BASIS FOR PERFORMANCE EVALUATION AND ASSESSMENTThree most highly rated benefits:• CLEARER SENSE OF THE STRATEGIC VISION OF THE FIRM• SHARPER FOCUS ON WHAT IS STRATEGICALLY IMPORTANT• IMPROVES UNDERSTANDING OF THE CHANGING ENVIRONMENT
  4. 4. TRIGGERING EVENTS FOR STRATEGIC CHANGE• SIGNIFICANT PERFORMANCE GAPS• CHANGES IN OWNERSHIP• CHANGES IN LEADERSHIP—A NEW CEO• INTERVENTION BY A SIGNIFICANT EXTERNAL ENTITY• STRATEGIC INFLECTION POINTIN GENERAL, ANY CHANGES, CRISES, OR DEVIATIONS FRO THE EXPECTED OR STATUS QUO
  5. 5. THE BASIC MODEL OF STRATEGIC MANAGEMENT1--ENVIRONMENTAL SCANNING – EXTERNAL ENVIRONMENT • Opportunities and Threats – INTERNAL ORGANIZATION • Strengths and Weaknesses2--STRATEGY FORMULATION – DEVELOPING A MISSION/VISION • Who are we? What is our business? Where are we headed? – SETTING OBJECTIVES • Financial Objectives – Earnings, ROA, Cash Flow • Strategic Position Objectives – Market Share, Customer Service, Competitive Position – CRAFTING STRATEGIES • How to achieve the targeted results?…What is our strategic plan? • Corporate, Business-level, Functional3--STRATEGY IMPLEMENTATION – ESTABLISHING PROGRAMS, BUDGETS, AND PROCEDURES – ASSIGNMENTS • Who does what by when?4--EVALUATION AND CONTROL – MONITORING, REVIEW, AND INTERVENTION • When should we intervene?
  6. 6. THREE STRATEGIC LEVELSCORPORATE-LEVEL STRATEGIES Are long-term investment strategies Is the corporate mission/vision well-served by continuing in this business? Seek a favorable portfolio of business activities for the corporation GROWTH STABILITY RETRENCHMENTBUSINESS-LEVEL (Divisional) STRATEGIES Are competitive strategies for each business segment the company operates in How to improve the relative market position of each product/service line? Emphasize development of a competitive advantage for each business line COST LEADERSHIP DIFFERENTIATION FOCUSFUNCTIONAL-LEVEL (Departmental) STRATEGIES Are departmental strategies that focus on resource utilization and efficiency Develop efficiency plans that are in harmony with higher-level objectives
  7. 7. TESTS FOR A WINNING STRATEGY THOMPSON & STRICKLANDGOODNESS-OF-FIT HOW WELL IS THIS STRATEGY MATCHED TO THE ORGANIZATION’S CAPABILITIES AND ASPIRATIONS?COMPETITIVE ADVANTAGE DOES THIS STRATEGY LEAD TO A SUSTAINABLE COMPETITIVE ADVANTAGE? DOES THIS STRATEGY STRENGTHEN OUR COMPETITIVE POSITION?PERFORMANCE IS PROFITABILITY ENHANCED? ARE LONG-TERM GAINS REALIZED IN STRATEGIC-POSITION AND IN FINANCIAL AREAS?
  8. 8. FIVE CRITICAL STRATEGIC QUESTIONS HAMBRICK & FREDERICKSONARENAS: WHERE WILL WE BE ACTIVE? …WHICH AREAS?VEHICLES: HOW WILL WE GET THERE?DIFFERENTIATORS: HOW WILL WE WIN IN THE MARKETPLACE?STAGING: HOW FAST CAN WE DO IT… AND IN WHAT SEQUENCE?ECONOMIC LOGIC: WHAT RETURN CAN WE EXPECT… AND WHEN WILL WE GET IT?
  9. 9. IMPLEMENTATIONFINDING A GOOD “FIT” BETWEEN STRATEGY AND ….-- ORGANIZATIONAL CAPABILITIES-- THE REWARD STRUCTURE-- INTERNAL POLICIES AND PROCEDURES-- THE ORGANIZATION’S CULTURE
  10. 10. WE IMPLEMENT STRATEGY BY:-- BUILDING AN ORGANIZATION (STRUCTURE) CAPABLE OF SUCCESSFULLY SUPPORTING AND CARRYING OUT THE STRATEGY-- DEVELOPING BUDGETS THAT STEER RESOURCES INTO CRITICAL INTERNAL ACTIVITIES-- MOTIVATING PEOPLE TO PURSUE TARGETED OBJECTIVES ENERGETICALLY-- TYING REWARDS TO ACHIEVEMENT OF TARGETED RESULTS-- CREATING A WORK ENVIRONMENT CONDUCIVE TO SUCCESSFUL IMPLEMENTATION OF STRATEGY-- INSTALLING STRATEGY-SUPPORTIVE POLICIES AND PROCEDURES-- DEVELOPING AN INFORMATION REPORTING SYSTEM TO TRACK PROGRESS AND MONITOR PERFORMANCE-- EXERTING INTERNAL LEADERSHIP TO DRIVE IMPLEMENTATION FORWARD
  11. 11. MYTHS OF CORPORATE PLANNING ACKOFF 81MOST CORPORATE PLANNING IS LIKE A RITUAL RAIN DANCE, IT HAS NO EFFECT ON THE WEATHER THAT FOLLOWS, BUT IT MAKES THOSE WHO ENGAGE IN IT FEEL THAT THEY ARE IN CONTROL.MOST DISCUSSIONS OF THE ROLE OF MODELS IN PLANNING ARE DIRECTED AT IMPROVING THE DANCING, NOT THE WEATHER.IMPLICATIONS:DON’T FOCUS EXCLUSIVELY ON THE PROCESS…KEEP AN EYE ON RESULTS!IS THERE PROOF THAT THINGS ARE IMPROVING?
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