Strategic Management in Action

Introducing the Concepts

Prentice Hall, 2002

End Show

1-1

Learning Objectives
1. Discuss why strategic management is important. 2. Define strategy and strategic management. 3. Describe the strategic management process.

4. Describe the three levels of organizational strategies.

5. Explain the historical evolution of strategic management. 6. Rebut misconceptions about strategy and strategic management. 7. Explain whos involved with strategic management and their role in managing strategically.
Prentice Hall, 2002
End Show

1-2

WHY IS STRATEGIC MANAGEMENT IMPORTANT?

Strategic Management
Gives everyone a role Makes a difference in performance levels

Provides systematic approach to uncertainties

Coordinates and focuses employees

Prentice Hall, 2002

End Show

1-3

WHAT IS STRATEGIC MANAGEMENT?

Strategy vs. Strategic Management

Prentice Hall, 2002
End Show

1-4

The Basics of Strategy & Strategic Management Definition of Strategy

A series of goal-directed decisions and actions matching an organization's skills and resources with the opportunities and threats in its environment

Prentice Hall, 2002

End Show

1-5

The Basics of Strategy & Strategic Management Strategy Involves:

Organizations goals Goal-directed action Related decisions and actions Internal strengths External opportunities and threats

Prentice Hall, 2002

End Show

1-6

The Basics of Strategy & Strategic Management Definition of Strategic Management

Decisions and actions where organizations
Analyze current situation Develop appropriate strategies Put strategies into action Evaluate, modify, or change strategies

Prentice Hall, 2002

End Show

1-7

The Basics of Strategy & Strategic Management Strategic Management entails:

Basic managerial functions

Planning Organizing Implementing Controlling

Prentice Hall, 2002

End Show

1-8

The Basics of Strategy & Strategic Management

Basic Activities of Strategic Management Figure 1-1

Strategy Formulation

Strategy Evaluation
Strategy Implementation

Prentice Hall, 2002

End Show

1-9

The Basics of Strategy & Strategic Management Strategic Management

Big picture view of organization influenced by its external environment

Four aspects that set apart Strategic Management

Interdisciplinary External focus Internal focus Future direction

1 - 10

Prentice Hall, 2002

End Show

The Strategic Management Process

Strategic Management in Action
Analyzing Current Situation Deciding on Strategies

Figure 1-2
Evaluating and Changing Strategies

Putting Strategies in Action

Situation Analysis
Organizational External Analysis Context Chapter 2 Chapter 3 Internal Analysis Chapter 4

Strategy Formulation

Strategy Implementation

Strategy Evaluation

Functional Chapter 5

Competitive Chapter 6

Corporate Chapter 7

Prentice Hall, 2002

End Show

1 - 11

The Strategic Management Process Situation Analysis

Scanning and evaluating context External environment Organizational environment

Prentice Hall, 2002

End Show

1 - 12

The Strategic Management Process Strategy Formulation

Three organizational levels Functional strategies

Competitive strategies
Corporate strategies

Prentice Hall, 2002

End Show

1 - 13

The Strategic Management Process Strategy Implementation

Process of putting strategies into action

Strategy Evaluation
Process of evaluating:
How the strategy has been implemented

Outcomes of the strategy

Prentice Hall, 2002

End Show

1 - 14

The Strategic Management Process Continuing Process of Strategic Management in Action

Ongoing and continuous cycle of
Strategy formulation Strategy implementation Strategy evaluation
Prentice Hall, 2002
End Show

1 - 15

Looking at Strategic Managements Past Strategys Military Roots

Battlefield strategies to gain an edge Exploit weak spots

Academic Origins of Strategic Management

Economic theory Early organizational studies
Prentice Hall, 2002
End Show

1 - 16

Looking at Strategic Managements Past

Strategic Planning & Strategic Management Emerge
Before 1960
Not an area of study

During the 1960s

Strategy and Structure Corporate Strategy Business Policy: Text and Cases

During the 1970s and 1980s

Becomes distinct academic field Research focus on strategic decisions vs. performance

Prentice Hall, 2002

End Show

1 - 17

Misconceptions About Strategy and Strategic Management Misconceptions

Strategy and strategic planning are dead Strategy is strictly for top management Strategy is about planning Strategy is stable and constant Strategic management outlines ultimate destination & route
Prentice Hall, 2002
End Show

1 - 18

WHOS INVOLVED WITH STRATEGIC MANAGEMENT?

The Role of the Board of Directors
Elected representatives of the companys stockholders Legally obligated to represent and protect stockholders interest

The Role of Top Management

Responsible for every decision and action of every employee Providing effective leadership

Other Strategic Managers and Organizational Employees

Implement put the strategies into action and monitor performance Evaluatedo the actual evaluations and take necessary actions Open book management
Prentice Hall, 2002
End Show

1 - 19

The Role of the Board of Directors

Table 1-2 Typical Board Responsibilities

Review and approve strategic goals and plans Review and approve organization's financial standards and policies Ensure integrity of organization's financial controls and reporting systems 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
End Show

Prentice Hall, 2002

1 - 20

The Role of Top Management Top Management

CEO Chief Executive Officer

COO Chief Operating Officer CFO CIO

Prentice Hall, 2002

Chief Financial Officer Chief Information Officer

End Show

1 - 21

The Role of Top Management

Determining Organizational Purpose or Vision Establishing Appropriately Balanced Controls

Effective Strategic Leadership Involves

Figure 1-5

Emphasizing Ethical Decisions and Practices

Effective Strategic Leadership

Exploiting and Maintaining Core Competencies

Developing Human Capital

Creating and Sustaining Strong Organizational Culture

1 - 22

Prentice Hall, 2002

End Show

Chapter One

Questions
Prentice Hall, 2002
End Show

1 - 23