Basic Concepts of Strategic Management Chapter 1 Learning Objectives Understand the benefits of strategic management Explain how globalization and environmental sustainability influence strategic management Understand the basic model of strategic management and its components Copyright © 2015 Pearson Education, Inc. 1-2 Learning Objectives Identify some common triggering events that act as stimuli for strategic change Understand strategic decision-making modes Use the strategic audit as a method of analyzing corporate functions and activities Copyright © 2015 Pearson Education, Inc. 1-3 The Study of Strategic Management Strategic Management  a set of managerial decisions and actions that determines the long-run performance of a corporation 1-4 Copyright © 2015 Pearson Education, Inc. The Study of Strategic Management Strategic Management includes: Internal and external environment scanning Strategy formulation Strategy implementation Evaluation and control Copyright © 2015 Pearson Education, Inc. 1-5 Phases of Strategic Management Phase 1: Basic financial planning Phase 2: Forecast-based planning Phase 3: Externally oriented strategic planning Phase 4: Strategic management Copyright © 2015 Pearson Education, Inc. 1-6 Benefits of Strategic Management The attainment of an appropriate match, or “fit,” between an organization’s environment and its strategy, structure and processes has positive effects on the organization’s performance. Strategic planning becomes increasingly important as the environment becomes more unstable. Copyright © 2015 Pearson Education, Inc. 1-7 Benefits of Strategic Management Clearer sense of strategic vision for the firm Sharper focus on what is strategically important Improved understanding of a rapidly changing environment 1-8 Copyright © 2015 Pearson Education, Inc. Impact of Globalization Globalization  the integrated internationalization of markets and corporations  has changed the way modern corporations do business Copyright © 2015 Pearson Education, Inc. 1-9 Impact of Innovation Innovation  describes new products, services, methods and organizational approaches that allow the business to achieve extraordinary returns Innovation is the implementation of potential innovations that truly drives businesses to be remarkable. Copyright © 2015 Pearson Education, Inc. 1-10 Impact of Sustainability Sustainability  refers to the use of business practices to manage the triple bottom line Copyright © 2015 Pearson Education, Inc. 1-11 Impact of Sustainability The triple bottom line involves: 1. the management of traditional profit/loss; 2. the management of the company’s social responsibility; and 3. the management of its environmental responsibility. Copyright © 2015 Pearson Education, Inc. 1-12 Theories of.

1. Basic Concepts of
Strategic
Management
Chapter 1
Learning Objectives
management
sustainability influence strategic management
management and its components
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Learning Objectives
act as stimuli for strategic change
sion-making modes

2. analyzing corporate functions and activities
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The Study of Strategic Management
tions that
determines the long-run performance of a
corporation
1-4 Copyright © 2015 Pearson Education, Inc.
The Study of Strategic Management
Strategic Management includes:
n
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3. Phases of Strategic Management
Phase 1: Basic financial
planning
Phase 2: Forecast-based
planning
Phase 3: Externally oriented
strategic planning
Phase 4: Strategic
management
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Benefits of Strategic Management
between an organization’s environment and its
strategy, structure and processes has positive
effects on the organization’s performance.
important as the environment becomes more
unstable.
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Benefits of Strategic Management

4. sense of strategic vision for the firm
important
environment
1-8 Copyright © 2015 Pearson Education, Inc.
Impact of Globalization
ntegrated internationalization of markets and
corporations
business
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Impact of Innovation
organizational approaches that allow the business
to achieve extraordinary returns

5. innovations that truly drives businesses to be
remarkable.
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Impact of Sustainability
the triple bottom line
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Impact of Sustainability
The triple bottom line involves:
1. the management of traditional profit/loss;
2. the management of the company’s social
responsibility; and
3. the management of its environmental
responsibility.
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6. Theories of Organizational Adaptation
gy
is successfully
established in a
particular
environmental niche,
it is unable to adapt
to changing
conditions
do adapt to changing
conditions by
imitating other
successful
organizations
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Theories of Organizational Adaptation
environment, but they also have the opportunity
and power to reshape their environment
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7. Theories of Organizational Adaptation
environment and uses knowledge offensively to
improve the fit between itself and its
environment
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Creating a Learning Organization
another and requires:
• Long-term commitment to the development
and nurturing of critical resources
• Learning organization
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Creating a Learning Organization

8. nd
transferring knowledge and at modifying its
behavior to reflect new knowledge and insights
competitiveness in a dynamic environment.
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Creating a Learning Organization
Learning organizations are skilled at four main
activities:
history as well as from the experiences of others
throughout the organization
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Basic Model of Strategic Management

9. Strategic management consists of four basic
elements:
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Basic Elements of the Strategic
Management Process
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Figure 1-1
Strategic Management Model
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Figure 1-2
Basic Model of Strategic Management

10. information from the external and internal
environments to key people within the
organization
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Environmental Variables
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1-23
Figure 1-3
Basic Model of Strategic Management
gy formulation
making that provides the company with the
criteria for attaining a competitive advantage
the business (Strategy), crafting the corporate

11. mission, specifying achievable objectives and
setting policy guidelines.
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Basic Model of Strategic Management
existence
escribes what the organization would like to
become
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Basic Model of Strategic Management
hat

12. states how the corporation will achieve its
mission and objectives
competitive disadvantage
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Hierarchy of Strategy
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Basic Model of Strategic Management
the formulation of a strategy with its
implementation
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Basic Model of Strategic Management
into action through the development of

13. programs, budgets and procedures
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Basic Model of Strategic Management
performance results are monitored so that
actual performance can be compared with
desired performance
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Basic Model of Strategic Management
management process
formance
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14. Initiation of Strategy: Triggering Events
strategy and can include:
• New CEO
• External intervention
• Threat of change of ownership
• Performance gap
• Strategic inflection point
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Strategic Decision Making
-term future of an entire
organization and have three characteristics:
• Rare
• Consequential

15. • Directive
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Three Characteristics of
Strategic Decisions
no precedent to follow.
quential
and demand a great deal of commitment from
people at all levels.
decisions and future actions throughout an
organization
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Mintzberg’s Modes of Strategic
Decision Making
Entrepreneurial Adaptive

16. Planning
Logical
incrementalism
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Strategic Decision-Making Process
1. Evaluate current performance results
2. Review corporate governance
3. Scan and assess the external environment
4. Scan and assess the internal corporate
environment
5. Analyze strategic (SWOT) factors
6. Generate, evaluate and select the best
alternative strategy
7. Implement selected strategies
8. Evaluate implemented strategies
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Strategic Decision-Making Process
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1-37

17. Figure 1-5
Strategic Decision-Making Process
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Figure 1-5
The Strategic Audit: Aid to Strategic
Decision Making
that enables a systematic analysis to be made of
various corporate functions and activities
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Instructions
For a Strategic Management class
Part1:
After reading about the Strategic Decision-Making Process in
the chapter discuss which of the eight steps you feel is the most
important of the process to achieve competitive success for a
firm. Please provide at least 250 words in your written

18. discussion work.
Part2:
In 250 words, discuss an ethical situation in the past year
involving a company. Describe the ethical issue. Do you agree
with how the firm handled the ethical issue, and why?
APA STYLE
ORIGINAL WORK ONLY
Include references and in text citations.
Instructions
For a
S
trategic Management
class
Part1:
After reading about the Strategic Decision
-
Making Process in the
chapter discuss which of the eight steps you feel is the most
important of the process to achieve competitive success for a
firm.
Please provide at l
east
2
50
words
in your written discussion work
.

19. Part2:
In 250 words
, d
iscuss an ethical situation in the past year
involving a company. Describe the ethical issue. Do you agree
with
how the firm handled the ethical issue, and why?
APA STYLE
ORIGINAL WORK ONLY
Include references and in text citations.
Instructions
For a Strategic Management class
Part1:
After reading about the Strategic Decision-Making Process in
the
chapter discuss which of the eight steps you feel is the most
important of the process to achieve competitive success for a
firm.
Please provide at least 250 words in your written discussion
work.
Part2:
In 250 words, discuss an ethical situation in the past year
involving a company. Describe the ethical issue. Do you agree
with
how the firm handled the ethical issue, and why?
APA STYLE
ORIGINAL WORK ONLY
Include references and in text citations.