2. Good Strategy and good strategy
execution are the most trustworthy
signs of good management
• Strategy: The formulation of organizational objectives,
scopes and action plans for getting advantage.
• Description of Strategy:
- Strategy: A declaration of intent
- Strategic intent: A tangible corporate goal, a point of view
about the competitive positions a company hopes to build
over a decade
- Strategic planning: the systematic determination of goals
and the plans to achieve them
- Strategy formulation: the entire process of conceptualizing
the mission of an organization, identifying the strategy and
developing long-range performance goals.
3. - Strategy implementation: Those activities that
employees and managers of an organization undertake
to enact the strategic plan and achieve the
performance goals
- Objectives: the end, the goals
- Plans: the product of strategy, the means to the end
- Strategic plan: a written statement that outlines the
future goals of organization, including long-term
performance goals
- Policies: broad guidelines to action, which establish the
parameters or rules.
4. • The strategy developed by:
- Senior management
- Approved by the board
- Negotiated and revised as they filter throughout
the organization
- Organization then develop plans to achieve goals
- The strategic planning process led by senior
management , who will continuously monitoring
the dynamic environment to make adjustments
to the strategy.
5. The Reality of the Strategic Process:
Intended strategy Realized Strategy
Discarded
Strategy
Emergent
Strategy
6. • Intended Strategy: the agreed-upon strategy
arrived at through the formal planning process
• Discarded Strategy: Deemed inappropriate
due to changing circumstances
• Emergent Strategy: The plan that changes
incrementally due to environmental changes
• Realized Strategy: Executed representing some
planned and some emergent strategy.
7. • Triggering events to stimulate a change in strategy:
- New CEO
- Threat of a change in ownership
- External intervention: ex. Customer complaint about a
defect or a financial backer refusing to invest any more
in the organization
- Performance gap
- Strategic inflation: rapid changes in technology,
customer preferences, or industry regulations will
trigger a change in strategy.
8. • A good strategy recognizes:
- The complexity of realities
- To be effective, strategic management
anticipates future problems
- Provides an alignment with external
contingencies and internal competencies
- Recognizes multiple stakeholders and is
- Concerned with measurable performance
9. • Organization’s basic strategies are classified into:
1. Corporate Strategy: Organizational level decisions that
focus on long-term survival. Corporate strategies are
concerned with questions such as : should we be in
business? What business should we be in?
2. Business Strategy: Plans to build a competitive focus in
one line of business. Business strategies are concerned
with questions such as: How should we compete? Should
we compete by offering products at price lower than
those of the competition or by offering the best service? It
is also concerned with how to build a competitive position
and with the best way to compete in that line of business.
10. Benifits of Strategy Formulation
• Clarity: It is focused and guided decision making about
resource allocation
• Coordination: Everyone is working toward the same goals
• Efficiency: Daily decision making is guided toward the
question ‘does it fit with our strategy?’
• Incentives: Employees understand the behaviours and
performance that will be rewarded
• Adjustment to change: If a major change is under
consideration, understanding the current strategy is
essential
• Career development: Helps potential employees decide if
they want to work for the company, if there is a skills fit and
training and development they will need to undergo.