1. Strategic Management
(Part 1)
QSB2413 Management Science

2. Recap
• In the previous lecture we have learned the
four basic managerial functions: Planning,
Organizing, Leading and Controlling.
• In this chapter, we will expand upon the
Planning function of a manager.

3. Planning
• Planning takes place in organization in 2 ways.
• There are short-term, operational plans and
tactics that guide the day-to-day activities.
• Next, there are long-term, overarching plans
that serve to direct an organization’s strategic
position for years to come.

4. Planning
• Planning provides a foundation for all
organizational activities.
• Through planning, managers coordinate
organizational activities so that the goals of
the organization can be achieved.
• Organizational success depends on the ability
of managers to develop a plan which able to
prescribe / set the activities necessary for the
organization to realize its goals.

5. Planning
Planning is an act of:-
• creating a goal and
• writing a blueprint for that goal.
** Without this first step, nothing else will work!
*** Once the plan has been formulated, the manager
or owner must then communicate them to every
employees, so that everyone knows what the goal is
and can work towards it.

6. Planning
• There are 3 parts to planning:
– 1) Setting a goal – what do you want to achieve?
– 2) Develop a strategy – how do you achieve your
goal?
– 3) Determine your tactics – what are the specific
details involved in the strategy?

7. Example of Planning
Goal
Complete
the project
in this year.
Strategy
24 hours
operation.
Tactics
Increase the number of
employees, work by
shifts, pay more to
workers.

8. Strategy
• Strategy is a plan of action designed to
achieve a long-term or overall aim.
• Strategy is a term that refers to a complex web
of thoughts, ideas, insights, experiences,
goals, expertise, perceptions and expectations
that provides general guidance for specific
actions in pursuit of particular ends.

9. Strategic Planning
• Plan is a method for doing or making something,
consisting of a goal and a course of action.
• Planning is the process of setting goals and
courses of action, developing rules and
procedures and forecasting future outcomes.
• Strategic Planning is identifying the current
business of a firm and the business it wants for
the future and the course of action or strategy it
will pursue.

10. Strategic Planning
• Strategic planning is a process by which an
organization determines where it wants to be
(goal) and how it will get there (how to
achieve the goal).
• Strategic planning is essential for
organizational success and it is an ongoing
process that should be responsive to changes
in the environment of the organization.

11. Strategic Planning
• Strategic planning typically originates / initiates
at the highest level of the organization and
focuses on enhancing the competitive position
and overall performance of the organization in
the long term.
• The purposes are to develop and maintain a
competitive advantage within the industries to
compete.

12. Strategic Management
• Strategic management is the process of
identifying and executing the organization’s
mission by matching the organizations
capabilities with the demands of its
environment.
• Strategic management is the highest level of
managerial activity.

14. Elements of Strategic Management
Strategic Management is a combination of three
main processes which are as follows:
1. Strategy Formulation (Step 1 to 4)
- Determining where you are now
- Determining where you want to go
- Determining how to get there
These 3 questions are the essence of strategic
planning.

15. Elements of Strategic Management
2. Strategy Implementation (Step 5)
- Allocation and management of sufficient
resources (financial, personnel, time, technology
support).
- Assigning responsibility of specific tasks or
processes to specific individuals or groups.
- It involves managing the process, including
monitoring results, comparing to benchmarks
and evaluating the efficiency of the process,
controlling the variances and making
adjustments.

16. Elements of Strategic Management
3. Strategy Evaluation (Step 6)
- Measuring the effectiveness of the
organizational strategy.

17. Strategic Management
(Planning)Process

18. Strategic Analysis
• Strategic analysis is the critical part of the
strategic planning process.
• Its purpose is to understand the current
position of the organization so its strategy for
moving the organization forward can be
developed.

19. Strategic Analysis
• The important components of a strategic
analysis include:
(1) An assessment of the organization’s vision,
mission and values,
(2) An assessment of the internal environment
for the organization,
(3) Review of external environment trends that
impact the strategy of the organization.

20. Let’s start with exploring vision,
mission and values.

21. Step 1: Develop Vision and Mission
Statement
• Vision is a general statement of an organization’s
intended direction that evokes emotional feelings
in its members.
• Mission is more specific and short-term.
• Goal is a specific result to be achieved; the end
result of a plan. (To complete the piling job in a
day)
• Objectives are the specific results toward which
effort is directed. (Liaises with contractors from
time to time to ensure completion of the specific
job)

22. Why have a mission statement?
• Mission statement is a statement that broadly
outlines the enterprise’s (firm / organization)
purpose and serves to communicate “who the
organization is, what it does, and where it’s
headed.”

23. Mission Statement
• It is the fundamental reason the organization
exists.
• Mission statements are usually crafted by
owners, top managers, and/or the board of
directors (representatives of the stockholders).
• Creating an effective mission statement is a
critical part of the strategic planning process as
an organization’s mission is the foundation upon
which its strategy will be built.

24. How to create an effective / a good
mission statement?

25. Good Mission Statement
• A good mission statement provides strategic
direction for employees and focuses directions on
the organization’s basic charge. (e.g. cheaper
price)
• There are three primary questions should
answers: (1) WHO will the organization serve? (2)
WHAT needs will the organization fulfill? (3) HOW
will the organization fulfill those needs?
• Mission statement serves as a framework for
making future strategic decisions.

27. Is the below example considered a
good mission statement?

29. What is Facebook’s mission
statement?

30. To give people the power to share and
make the world more open and
connected. To stay people connected
with friends and family, to discover
what’s going on in the world, and to
share and express what matters to
them.

31. Vision Statement
• In addition to the mission statement, many
companies choose to develop vision
statements.
• Mission statement describes an organization’s
fundamental purpose.
• A vision statement describes what the
organization aspires to become over time.
• Organizations must live their mission in order
to realize their vision.

32. Values Statement
• Many organizations have strong values
statements that help set the tone for its
culture and communicate the qualities that
are important to the organization.
• Values statements reflect the core ethical
beliefs or standards that exist within an
organization.

33. Assume that you own a construction
company in Malaysia. What would be
your mission, vision and values
statements?

35. EcoWorld

36. Step 2: Internal and External Analysis
• SWOT analysis is a process that identifies the
strengths, weaknesses, opportunities and
threats of an organization.

37. To be continued in Part 2