Ch 1 Strategic Management Concepts

CHAPTER 1
Basic Concepts
of Strategic
Management
STRATEGIC MANAGEMENT & BUSINESS POLICY
10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-1
Basic Concepts of Strategic Management
Globalization
Internationalization of markets and corporations
Global (worldwide) markets rather than national
markets
Electronic Commerce
Use of the Internet to conduct business
transactions
Basis for competition on a more strategic level rather
than traditional focus on product features and costs
1-2
Electronic Commerce -- Trends
Forcing company transformation

Market access & branding changing
disintermediation of traditional
distribution channels
Balance of power shift to consumer
Competition changing
1-3
Electronic Commerce -- Trends
Pace of business increasing

Internet purchasing beyond traditional
boundaries
Knowledge key asset source of
competitive advantage
1-4
Strategic Management Defined
Set of managerial decisions and actions

that determines the long-run performance
of a firm.
1-5
4 Phases of Strategic Management

1.
2.
3.
4.
Basic financial planning

Forecast-based planning
Externally-oriented planning
Strategic management
1-6
Highly Rated Benefits
Clearer sense of strategic vision

Sharper focus on strategic importance
Improved understanding of changing
environment
1-7
Not Always a Formal Process
Where is the organization now? (not

where do we hope it is)
If no changes are made, where will the
organization be in 1,2,5 or 10 years?
What specific actions should
management undertake?
What are the risks and payoffs?
1-8
Basic Elements of the Strategic

Management Process
1-9
Environmental Scanning Defined
Monitoring, evaluation, and disseminating

information from external and internal
environments to key people in the firm
1-10
Environmental
Variables
1-11
Environmental Scanning
SWOT Analysis
Strengths Weaknesses
Opportunities - Threats
1-12
Strategy Formulation
Development of long-range plans for

effective management of opportunities
and threats in light of corporate
strengths and weaknesses
1-13
Strategy Formulation
Mission Statement
Purpose/reason for organization

Promotes shared expectations
Communicates public image
Who we are; what we do; what we
aspire to
1-14
Organizational Adaptation
Organization fit with environment
Theory of population ecology

Institution theory
Strategic choice perspective
Organizational learning theory
1-15
Organizational Adaptation
Strategic flexibility
Demands long-term commitment to

development of critical resources
Demands firm become a learning

organization
1-16
Learning Organizations
An organization skilled at creating,

acquiring, and transferring
knowledge and at modifying its
behavior to reflect new knowledge
and insights
1-17
Learning Organizations
4 Chief Activities
Systematic problem solving

New approach experimentation
Learning from experiences
Intra-organization knowledge transfer
1-18
Hierarchy of
Strategy
1-19
Goals & Objectives
Corporate Goals/Objectives
Profitability (net profit)
Growth
Resource utilization (ROE, ROI)
Market leadership
1-20
3 Types of Strategy
Corporate strategy
Business strategy
Functional strategy
1-21
Corporate Strategy
Stability
Growth
Retrenchment
1-22
Business Strategy
Competitive strategies
Cooperative strategies
1-23
Functional Strategy
Technological leadership
Technological followership
1-24
Strategic
Decision-Making
Process
1-25
Strategic Decision Making
Strategic Decisions
Rare
Consequential
Directive
1-26
Strategic Decision Making
Mintzbergs Modes
Entrepreneurial mode
Adaptive mode
Planning mode
Logical incrementalism
1-27
Hambrick and Fredrickson Good Strategy
5 Elements of Good Strategy

1.
2.
3.
4.
5.
Arenas
Vehicles
Differentiators
Staging
Economic logic
1-28
CHAPTER 2
Corporate Governance
1-29
CHAPTER 2
Corporate
Governance

10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-30
1-31
The relationship among the board of

directors, top management, and
shareholders determining the direction
and performance of the corporation
1-32
Role of Board
Monitor
Evaluate and influence
Initiate and determine
1-33
Board of Directors Continuum
1-34
Board of Directors
Members -Inside directors

management directors
Officers or execs employed by the firm
Outside directors
non-management directors
Execs of other firms not employed by the
boards corporation
1-35
Agency Theory
Agency Problem
Objectives of owners & agents in conflict
Difficult for owners to verify agent performance
Risk Sharing Problem

Owners & agents risk assessment in conflict
1-36
Stewardship Theory
Executives more motivated to act in best

interest of the corporation than their own
self-interests. Theory that over time, senior
executives tend to view corporation as
extension of selves.
1-37
Board of Directors
When Outsiders can be considered Insiders

Affiliated Directors
Retired Directors
Family Directors
1-38
Board of Directors
Codetermination
The inclusion of a corporations employees on its
board of directors
1-39
Board of Directors
Interlocking Directorates
Direct Interlocking
Indirect Interlocking
1-40
Board of Directors
Nominations & Elections

Traditional Approach
CEO invitation to membership
Shareholders approval in annual proxy statement
All nominees usually elected
1-41
Board of Directors
Nominations & Elections

Staggered Board Approach
Staggered terms of service/election
1-42
Board of Directors
Sarbanes-Oxley
Code of Ethics
Audit, Nominating, and Compensation
Committees all outside directors
1-43
Board of Directors
Organization of the Board

Size
Charter & Bylaws Determination
1-44
Board of Directors
Review & shaping of strategy
Pressure for corporate performance
Demand for executive stock ownership
Outside directors increasing
Impact of Sarbanes-Oxley
1-45
Board of Directors
Transformational leaders
Change agents through vision for change
1-46
Board of Directors
Successful CEOs
Strategic vision
Passion for the company
Strong communication
charisma
1-47
Board of Directors
Executive Leadership
Strategic vision
Role model
1-48
Board of Directors
Executive Leadership
Communication of performance standards
Demonstrates confidence in abilities of followers
1-49
Strategic Management Process
Strategic Planning Staff

Supports top management & business units in
the strategic planning process
1-50

Identify & analyze company-wide strategic issues
Generate strategic alternatives
1-51

Facilitate business units in coordinating activities
related to strategic planning process
1-52
CHAPTER 3
Ethics & Social
Responsibility
1-53
CHAPTER 3
Ethics & Social
Responsibility

10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-54
Ethics & Social Responsibility
1-55
Broader responsibility -Private corporations have responsibility to

society that extend beyond making a profit
1-56
Social Responsibility
Milton Friedman
There is one and only one social
responsibility of businessto use its
resources and engage in activities designed
to increase its profits so long as it stays
within the rules of the game, which is to say,
engages in open and free competition
without deception or fraud.
1-57
Carrolls 4 Responsibilities
Economic
Legal
Ethical
Discretionary
1-58
Carrolls 4 Responsibilities
1-59
Corporate Stakeholders
Affect or are affected by the

achievement of the corporations
objectives
1-60
Corporate Stakeholders
Stakeholder Analysis
Primary stakeholder
Sufficient bargaining power to affect outcomes
Secondary stakeholder
Indirect stake but are affected by corporations actions
Stakeholder Input
Determine whether input is necessary
1-61
Ethical Behavior
business ethics
Argument that there is no such thing it is an
oxymoron
1-62
Ethical Decision Making
Corporate practices -Massive write-downs and restatements of profit

Misclassification of expenses as capital
expenditures
Pirating corporate assets for personal gain
1-63
Recent Survey Results -70% distrust business executives

Enron
WorldCom
1-64
Reasons for Unethical Behavior
Provocative Question -Why are businesspeople perceived to be

acting unethically?
1-65
Perceptions caused by -Not aware of impropriety

Cultural norms and values vary
Governance systems based on rule or
relationships
Differences in values between
businesspeople and key stakeholders
1-66
Allport-Vernon-Lindzey Study of Values -Aesthetic

Economic
Political
Religious
Social
Theoretical
1-67
Most common reasons for bending rules -Organizational performance required it

Ambiguous or out of date rules
Pressure from others everyone else does it
1-68
Moral Relativism
Morality is relative to some personal, social,

or cultural standard and there is no method
for deciding whether one decision is better
than another.
1-69
Kohlbergs Levels of Moral Development
1. Preconventional level
Characterized by a concern for self
Personal interest
Avoidance of punishment
1-70
2. Conventional level
Characterized consideration of societys values
External code of conduct
1-71
3. Principled level
Characterized by adherence to internal moral
code
Universal values or principles
1-72
Encouraging Ethical Behavior
Codes of Ethics
Specifies how an organization expects its
employees to behave on the job.
1-73
Guidelines for Ethical Behavior

Ethics
Morality
Law
1-74
Approaches to Ethical Behavior

Utilitarian
Judged by consequences
Individual Rights
Fundamental rights in all decisions
Justice
Distribution in equitable fashion
1-75
Approaches to Ethical Behavior

Categorical imperative
golden rule
Means - Ends
1-76
Strategy Bits
192 U.S. companies surveyed -92% monitored employees use of e-mail/Internet

26% monitored employees electronic activities all
the time
Almost none had checks in place to protect
employees privacy
1-77
CHAPTER 4
Environmental
Scanning and
Industry Analysis
1-78
CHAPTER 4
Environmental
Scanning and
Industry Analysis
10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-79
Environmental Scanning
Societal environment -Economic forces

Technological forces
Political-legal forces
Sociocultural forces
1-80
Societal Environment
Economic Forces -Regulate exchange of materials, money,

energy and information
1-81
Technological Forces -Generate problem-solving inventions
1-82
Political-legal Forces -Allocate power; provide laws and regulations
1-83
Sociocultural Forces -Regulate values, mores, and customs of

society
1-84
Task Environment
Task environment -Elements or groups that directly affect a

corporation and are affected by it
1-85
Task Environment
Industry Analysis -In-depth examination of key factors within a

corporations task environment
1-86
Variables in Societal Environment
1-87
Demographic Trends
1-88
Transformational Sociocultural Trends
8 Current Trends
Increasing environmental awareness
Growing health consciousness
Expanding seniors market
Impact of the Generation Y boomlet
Declining mass market
Changing pace and location of life
Changing household composition
Increasing diversity of workforce & market
1-89
International Societal Environments
1-90
Scanning the Task Environment
1-91
Ethical Behavior
business ethics
Argument that there is no such thing it is an
oxymoron
1-92
Corporate practices -Massive write-downs and restatements of profit

Misclassification of expenses as capital
expenditures
Pirating corporate assets for personal gain
1-93
External Strategic Factors
Strategic myopia -Willingness to reject unfamiliar as well as

negative information
1-94
Issues Priority Matrix
1-95
Analyzing the Task Environment
1-96
Porters Approach to Industry Analysis
Threat of New Entrants

Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages
Government policy
1-97
Rivalry Among Existing Firms

Number of competitors
Rate of industry growth
Product or service characteristics
Amount of fixed costs
Capacity
Height of exit barriers
Diversity of rivals
1-98
Threat of Substitute Products or Services

Bargaining Power of Buyers
Bargaining Power of Suppliers
Relative Power of Other Stakeholders
1-99
Industry Evolution
Fragmented Industry
No dominant industry
1-100
Industry Evolution
Consolidated Industry
Dominated by a few large firms
1-101
International Risk Assessment
Continuum of International Industries
1-102
Strategic Groups
1-103
Strategic Types
General Types
Defenders
Prospectors
Analyzers
Reactors
1-104
Competitive Intelligence
Called business intelligence
Gathering information on a companys

competitors
1-105
Forecasting
Forecasting Techniques -Extrapolation

Brainstorming
Expert opinion
Delphi technique
Statistical modeling
Scenario writing
1-106
Synthesis of External Factors -- EFAS
1-107
CHAPTER 5
Internal
Scanning:
Organizational
Analysis
1-108
1-109
CHAPTER 5
Internal
Scanning:
Organizational
Analysis
10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-110
Resource-Based Approach to Organizational Analysis
Internal strategic factors -Critical strengths and weaknesses that are

likely to determine if the firm will be able to take
advantage of opportunities while avoiding
threats
1-111
Resources
Capabilities
Competency
Core competency
Distinctive competency
1-112
Core and Distinctive Competencies
VRIO Framework -Value

Rareness
Imitability
Organization
1-113
5-Step Approach Strategy Analysis -1.

2.
3.
4.
5.
Identify and classify resources

Combine strengths into capabilities
Appraise profit potential of capabilities
Select strategy that best exploits
Identify resource gaps invest in weaknesses
1-114
Continuum of Sustainability
1-115
Sustainability of Advantage
Durability -Rate at which a firms underlying resources

and capabilities depreciate or become obsolete
1-116
Imitability -Rate at which a firms underlying resources

and capabilities can be duplicated by others
1-117
Core Competency can be imitated -Transparency

Transferability
Replicability
1-118
Business Models
Companys method for making money in

the current business environment.
1-119
Business Models
Types of Models -Customer Solutions Model

Profit Pyramid Model
Multi-Component System/Installed Base Model
Advertising Model
Switchboard Model
1-120
Business Models
Types of Models -Time Model

Efficiency Model
Blockbuster Model
Profit Multiplier Model
Entrepreneurial Model
De Facto Standard Model
1-121
Value-Chain Analysis
Linked set of value-creating activities

beginning with basic raw material and
ending with distributors getting final
goods into hands of customers
1-122
Value-Chain Analysis
Typical Value Chain for

a Manufactured Product
1-123
Corporate Value-Chain Analysis
Primary activities
Support activities
1-124
Corporations Value Chain
1-125
Scanning Functional Resources & Capabilities
Basic Organizational Structures -Simple structure

Functional structure
Divisional structure
Strategic business units (SBUs)
Conglomerate structure
1-126
Basic Organizational Structures
1-127
Corporate Culture
Collection of beliefs, expectations, and

values learned and shared by a
corporations members and
transmitted from one generation of
employees to another
1-128
Strategic Marketing Issues
Market Position & Segmentation

Marketing Mix
Product Life Cycle
Brand & Corporate Reputation
1-129
Product Life Cycle
1-130
Strategic Financial Issues
Financial leverage
Capital budgeting
1-131
Strategic Research & Development Issues
R&D Intensity
Technological Competence
Technology Transfer
1-132
Technological Discontinuity
1-133
Strategic Human Resource Management Issues
HRM
Increasing use of teams
Union relations
Temporary workers
Quality of work life
Human diversity
1-134
Internal Factor Analysis Summary Table
1-135
CHAPTER 6
Strategy Formulation:
Situation Analysis &
Business Strategy
1-136
CHAPTER 6
Strategy Formulation:
Situation Analysis &
Business Strategy
10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-137
Situational Analysis
Strategy formulation -Strategic planning or long-range planning

Develops mission, objectives, strategies, policies
1-138
--process of finding a strategic fit
between external opportunities and

internal strengths while working around
external threats and internal weaknesses
1-139
IFAS Maytag as Example
1-140
EFAS Maytag as Example
1-141
SFAS Matrix
1-142
Niche -Need in the marketplace that is currently

unsatisfied
1-143
Corporate Goal -Find propitious niche

Strategic window
1-144
SWOT -Internal
Strengths/Weaknesses
External
Opportunities/Threats
1-145
TOWS Matrix
1-146
Business Strategy
Focuses on improving competitive

position of companys products or
services within the specific industry or
market segment
1-147
Porters Competitive Strategies
Competitive Strategy -Low cost

Differentiation
Direct competition
Focus on niche
1-148
Generic Competitive Strategies -Lower Cost strategy

Greater efficiencies than competitors
Differentiation strategy
Unique/superior value, quality, features, service
1-149
Competitive Advantage -Determined by Competitive Scope

Breadth of the target market
1-150
1-151
Cost Leadership -Low-cost competitive strategy

Broad mass market
Efficient-scale facilities
Cost reductions
Cost minimization
1-152
Differentiation
Broad mass market
Unique product/service
Premiums charged
Less price sensitivity
1-153
Cost-Focus
Low-cost competitive strategy
Focus on market segment
Niche focused
Cost advantage in market segment
1-154
Differentiation Focus
Specific group or geographic market focus
Differentiation in target market
Special needs of narrow target market
1-155
Stuck in the middle

No competitive advantage
Below-average performance
1-156
Risks of Generic Strategies
Risks of Cost Leadership

Risks
of CostisLeadership
Cost
leadership
not
Cost
leadership
is
not
sustained:
sustained:
Competitors imitate.
Competitors
imitate.
Technology
changes.
Technology
changes.
Other
bases for
cost
leadership
Other bases
for
erode. cost
leadership
erode.
Proximity
in differentiation
is
Proximity
in
differentiation
is
lost.
lost.focusers achieve even
Cost
Costcost
focusers
achieve even
lower
in segments.
lower cost in segments.
Risks of Differentiation
Risks of Differentiation
Differentiation
is not
Differentiation
is not
sustained:
sustained:
Competitors imitate.
Competitors
imitate.
Bases
for differentiation
become
Bases less
for differentiation
important to
become
less
important to
buyers.
Costbuyers.
proximity is lost.
Cost
proximity
is lost.
Differentiation
focusers
Differentiation
focusers
achieve
even greater
achieve eveningreater
differentiation
segments.
differentiation in segments.
Risks of Focus
Risks
ofstrategy
Focus is
The
focus
The focus strategy is
imitated:
imitated:
The
target segment becomes
The
targetunattractive:
segment becomes
structurally
unattractive:
structurally
Structure erodes.
Structure
erodes.
Demand
disappears.
Demand
disappears.
Broadly
targeted
competitors
Broadly
targeted
competitors
overwhelm the segment:
the segment:
overwhelm
The segments
differences
The segments
from other
differences
from other
segments narrow.
segments
narrow.
The
advantages
of a
broad
The advantages
of a
line increase.
linesubsegment
increase.
Newbroad
focusers
New
focusers subsegment
the
industry.
the industry.
1-157
8 Dimensions of Quality
1-158
Competitive Strategy
Industry Structure -Fragmented Industry

Consolidated Industry
1-159
Competitive Tactics
Timing Tactics -First mover

Late movers
1-160
Competitive Tactics
Market Location Tactics -Frontal Assault

Flanking Maneuver
Bypass Attack
Encirclement
Guerrilla Warfare
1-161
Competitive Tactics
Defensive Tactics -Raise structural barriers

Increase expected retaliation
Lower the inducement for attack
1-162
Cooperative Strategies
Collusion
Strategic Alliances
Mutual service consortia
Joint ventures
Licensing arrangements
Value-chain partnerships
1-163
CHAPTER 7 Strategy
Formulation: Corporate
Strategy
1-164
CHAPTER 7 Strategy
Formulation: Corporate
Strategy

10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-165
Corporate Strategy
3 Key Issues
Firms directional strategy
Firms portfolio strategy
Firms parenting strategy
1-166
Corporate Directional Strategies
1-167
Corporate Strategy
Directional Strategy
Orientation toward growth
Expansion, contraction, status quo
Concentration or diversification
Internal development or acquisitions, mergers, or
alliances
1-168
Corporate Strategy
Directional Strategy
3 Grand Strategies
Growth strategies
Stability strategies
Retrenchment strategies
1-169
Corporate Strategy
Growth Strategies -External mechanisms

Mergers
Acquisitions
Strategic alliances
1-170
Corporate Strategy
Growth Strategies -2 Basic forms

Concentration
Diversification
1-171
Corporate Strategy
Basic Concentration Strategies -Vertical growth

Horizontal growth
1-172
Corporate Strategy
Vertical Growth -Vertical integration

Full integration
Taper integration
Quasi-integration
Long-term contract
1-173
Corporate Strategy
Vertical Growth -Backward integration

Forward integration
1-174
Corporate Strategy
Concentration -Horizontal Growth

Horizontal integration
1-175
Corporate Strategy
Basic Diversification Strategies -Concentric Diversification

Conglomerate Diversification
1-176
Corporate Strategy
Concentric Diversification -Growth into related industry

Search for synergies
1-177
Corporate Strategy
Conglomerate diversification -Growth into unrelated industry

Concern with financial considerations
1-178
Corporate Strategy
International Entry Options -Exporting

Licensing
Franchising
Joint Ventures
Acquisitions
Green-Field Development
1-179
Corporate Strategy
International Entry Options -Production Sharing

Turnkey Operation
BOT Concept (Build, Operate, Transfer)
Management Contracts
1-180
Corporate Strategy
Stability Strategies -Pause/proceed with caution

No change
Profit strategies
1-181
Corporate Strategy
Retrenchment Strategies -Turnaround

Captive Company Strategy
Selling out
Bankruptcy
Liquidation
1-182
Corporate Strategy
Portfolio Analysis -Resource commitment on best products to

ensure continued success
Resource commitment on new costly products
high risk
1-183
BCG Matrix (Portfolio Analysis)
1-184
GE Business Screen (Portfolio Analysis)
High
Winners
A
Winners
B
C
Question
Marks
Industry Attractiveness
D
Winners
E
Medium
Average
Businesses
F
Losers
Losers
G
Low
Profit
Producers
Strong
Losers
Average
Weak
Business Strength/Competitive Position

1-185
Corporate Strategy
Corporate Parenting Strategy -Strategic factors

performance improvement
Analyze fit
1-186
CHAPTER 8 Strategy
Formulation: Functional
Strategy & Strategic
Choice
1-187
CHAPTER 8 Strategy
Formulation: Functional
Strategy & Strategic
Choice
10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-188
Functional Strategy
The approach a functional area takes to

achieve corporate and business unit
objectives and strategies by maximizing
resource productivity
1-189
Functional Strategy
Marketing Strategy
Pricing
Selling
Distribution
1-190
Functional Strategy
Marketing Strategy
Product development
Line extension
1-191
Functional Strategy
Marketing Strategy
Advertising and promotion
Push strategy
Pull strategy
1-192
Functional Strategy
Marketing Strategy
Pricing
Skim pricing
Penetration pricing
Dynamic pricing
1-193
Functional Strategy
Financial Strategy
Leveraged buyout
Reversed stock split
Tracking stock
1-194
Functional Strategy
R&D Strategy
Technological leader
Technological follower
Open innovation
1-195
Functional Strategy
Operations Strategy
Job shop
Connected line batch flow
Flexible manufacturing systems
Dedicated transfer lines
Mass production
Continuous improvement system
Modular manufacturing
1-196
Functional Strategy
Purchasing Strategy
Multiple sourcing
Sole sourcing
Just-in-time (JIT)
Parallel sourcing
1-197
Functional Strategy
Logistics Strategy
Centralization
Outsourcing
Internet
1-198
Functional Strategy
HRM Strategy
360 degree appraisal
1-199
Functional Strategy
Outsourcing errors
Activities that should not be outsourced
Wrong vendor selection
Writing poor contract
Overlooking personnel issues
Hidden costs of outsourcing
Failing to plan exit strategy
1-200
Proposed Outsourcing Matrix
1-201
Functional Strategy
Strategies to Avoid
3 Follow the leader
Hit another home run
Arms race
Do everything
Losing hand
1-202
Corporate Strategy
Growth Strategies -External mechanisms

Mergers
Acquisitions
Strategic alliances
1-203
Constructing Corporate Scenarios
1-204
Functional Strategy
Subjective Factors Affecting Decisions -Managements attitude toward risk

Pressures from stakeholders
Pressures from corporate culture
Needs and desires of key managers
1-205
Stakeholder Priority Matrix
1-206
Strategic Choice
Avoiding the Consensus Trap -Devils Advocate

Dialectical Inquiry
1-207
Strategic Choice
Evaluation of Strategic Alternatives -Mutual exclusivity

Success
Completeness
Internal consistency
1-208
CHAPTER 9 Strategy
Implementation:
Organizing for Action
1-209
CHAPTER 9 Strategy
Implementation:
Organizing for Action

10TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
1-210
Strategy Implementation
--Sum total of activities & choices

required for strategic plan execution
--Strategy implementation through
programs, budgets, and procedures
1-211
Key Implementation Questions

Who carries out strategic plan?
What needs doing for alignment w/ strategy?
How is work coordinated?
1-212
Programs
Action oriented
Matrix of change
Feasibility
Sequence of execution
Location
Pace & nature of change
Stakeholder evaluations
1-213
The Matrix of Change
1-214
Achieving Synergy
Shared know-how
Coordinated strategies
Shared tangible resources
1-215
Achieving Synergy
Economies of scale or scope
Pooled negotiating power
New business creation
1-216
Structure follows strategy

New strategy is created
New administrative problems emerge
Economic performance declines
New appropriate structure is invented
Profit returns to previous level
1-217
Stages of Corporate Development

Stage I: Simple structure
Stage II: Functional structure
Stage III: Divisional structure
Stage IV: Beyond SBUs
1-218
Blocks to Changing Stages

Loyalty to comrades
Task oriented
Single-mindedness
Working in isolation
1-219
Organizational Life Cycle
1-220
Changing Structural Characteristics of Modern Organizations
1-221
Advanced Types of Organizational

Structures
Matrix
Temporary cross-functional task forces
Product/brand management
Mature matrix
1-222
Advanced Types of Organizational

Structures
Network structure (virtual organization)
Cellular organization
1-223
Network Structure
1-224
Six Sigma
Define
Measure
Analyze
Improve
Establish
1-225
Job design to implement strategy

Job enlargement
Job rotation
Job enrichment
Job characteristics model
1-226
International Issues
MNCs
International Strategic Alliances
1-227
International Development Stages

Domestic company
Domestic company w/export division
Domestic company w/intl division
MNC w/multidomestic emphasis
MNC w/global emphasis
1-228
Centralization vs. Decentralization

Product-group structure
Geographic-area structure
1-229
Geographic Area Structure
1-230
1-231

Ch 1 Strategic Management Concepts

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Ch 1 Strategic Management Concepts

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CHAPTER 1

Basic Concepts of Strategic Management

Basic Concepts of Strategic Management

Electronic Commerce -- Trends

Forcing company transformation

Basic Concepts of Strategic Management

Electronic Commerce -- Trends

Pace of business increasing

Strategic Management Defined

Set of managerial decisions and actions

Basic Concepts of Strategic Management

4 Phases of Strategic Management

Basic financial planning

Basic Concepts of Strategic Management

Highly Rated Benefits

Clearer sense of strategic vision

Basic Concepts of Strategic Management

Not Always a Formal Process

Where is the organization now? (not

Basic Concepts of Strategic Management

Basic Elements of the Strategic

Environmental Scanning Defined

Monitoring, evaluation, and disseminating

Basic Concepts of Strategic Management

Development of long-range plans for

Purpose/reason for organization

Organization fit with environment

Theory of population ecology

Demands long-term commitment to

Demands firm become a learning

An organization skilled at creating,

Systematic problem solving

Basic Concepts of Strategic Management

Goals & Objectives

Basic Concepts of Strategic Management

Basic Concepts of Strategic Management

Basic Concepts of Strategic Management

Basic Concepts of Strategic Management

Basic Concepts of Strategic Management

Strategic Decision Making

Strategic Decision Making

Hambrick and Fredrickson Good Strategy

5 Elements of Good Strategy

STRATEGIC MANAGEMENT & BUSINESS POLICY

The relationship among the board of

Board of Directors Continuum

Members -Inside directors

Risk Sharing Problem

Executives more motivated to act in best

When Outsiders can be considered Insiders

Nominations & Elections

Nominations & Elections

Organization of the Board

Strategic Management Process

Strategic Planning Staff

Strategic Management Process

Strategic Planning Staff

Strategic Management Process

Strategic Planning Staff

STRATEGIC MANAGEMENT & BUSINESS POLICY

Ethics & Social Responsibility

Broader responsibility -Private corporations have responsibility to

Affect or are affected by the