Strategic Management

Strategy
A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem The art and science of planning and marshalling resources for their most efficient and effective use

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Strategy Involves
Organizations goals Goal-directed actions Matching key internal strengths with external opportunities and threats Choices made where to play, how to win, to maximize long term value.

Strategic Management

The process of analyzing the current situation, developing appropriate strategies, putting those strategies into action and evaluating, modifying, or changing those strategies as needed

Strategic Management

Analyzing Current Situation

Deciding on Strategies

Putting Strategies in Action

Evaluating and Changing Strategies

Situation Analysis
Organizational Context External Analysis

Strategy Formulation

Strategy Implementation

Strategy Evaluation

Functional Competitive

Internal Analysis

Corporate

Characteristics of Strategic Management

Four aspects that set apart Strategic Management

Interdisciplinary External focus Internal focus Future direction

The Strategic Management Process

Situation Analysis entails scanning and

evaluating

Organizational context External environment Organizational environment

Levels of Strategies
What direction are we going and what business(es) are we in or do we want to be in?

Corporate

How are we going to compete in our chosen business(es)?

Competitive:

What resources and capabilities do we have to support the corporate and competitive strategies?

Functional

Strategic Management Process

Strategy Implementation
Putting the organizations various strategies into action

Strategy Evaluation
Evaluating how the strategy has been implemented as well as the outcomes of the strategy

Whos Involved with Strategic Management?

Board of Directors Elected representatives of stockholders Play significant role in corporate governance Top Management Team Ultimately responsible for every decision and action of every organizational employee Act as strategic leaders
Other Strategic Managers and Organizational Employees

Responsible for strategy implementation and evaluation

Typical Board Responsibilities

Review and approve strategic goals and plans Review and approve organizations financial standards and policies Ensure integrity of organizations financial controls and reporting system Approve an organizational philosophy Monitor organizational performance and regularly review performance results Select, evaluate, and compensate top-level managers Develop management succession plans Review and approve capital allocations and expenditures Monitor relations with shareholders and other key stakeholders

Other responsibilities may be assigned depending on the unique culture and needs of the organization

Board Involvement in the Strategic Management Process

INITIATING ROLE (Highest level of board involvement)

APPROVING ROLE

(Lowest level of board involvement)

Effective Strategic Leadership Involves

Determining Organizational Purpose or Vision Establishing Appropriately Balanced Controls

Emphasizing Ethical Decisions and Practices

Effective Strategic Leadership

Exploiting and Maintaining Core Competencies

Developing Human Capital Creating and Sustaining Strong Organizational Culture

Strategic Management in Todays World

Three important issues affecting strategic management in todays world
Globalization Corporate governance E-business

Corporate Governance
Corporate governance is the determination of the broad uses to which organizational resources will be deployed and the resolution of conflicts among the myriad participants in organizations Disclosure Law law designed to protect investors by improving the accuracy and reliability of corporate disclosures

Why is Strategic Management Important?

It gives a role to everyone in an organization to manage strategically. It helps the organization perform well. It helps the organization to effectively cope with the uncertainties in the external and internal environment. It helps to coordinate various functions and activities

Questions